Britain's Conservatives say no plans to increase VAT

Britain's main opposition Conservative Party rejected a newspaper report which said it was considering raising the sales tax VAT to as high as 20 percent.

Britain's Conservatives say no plans to increase VAT

Britain's main opposition Conservative Party, favourite to win a national election to be held this year, rejected a newspaper report on Saturday which said it was considering raising the sales tax VAT to as high as 20 percent.

"We have absolutely no plans to increase VAT," a party spokesman told Reuters, without giving any further details.

VAT recently returned to a rate of 17.5 percent after a year-long temporary reduction introduced by the government as part of a package of measures to keep the economy going forward during the deepest recession in decades.

There has been speculation that both the ruling Labour Party and the Tories would increase VAT to help reduce a record deficit of 178 billion pounds ($279 billion), 12 percent of gross domestic product this year.

Financial markets are looking for signs from whoever takes power they are serious about tackling the deficit.

The newspaper said a 20 percent rate, in line with the European average, would raise an extra 13 billion pounds a year.

The Times newspaper quoted one City source to the Tory tax team as saying: "There is a view across the Conservative Party that VAT is going to have to go up."

The Tories have previously denied similar newspaper reports, while declining to give details of its tax plans.

Tory business spokesman Ken Clarke was quoted in the Times article as saying: "We are vague about tax increases because we don't like them."

The paper also said Labour was considering a rise in VAT, without citing any source.

Nobody from Labour was immediately available to comment.

Reuters

Last Mod: 13 Şubat 2010, 18:11
Add Comment