- Proposed VAT Increase: The government is considering raising the highest VAT rate from 21% to 21.4% to address a €1.2 billion budget deficit, with expected revenue generation of around €1.3 billion.
- Alternative Tax Revenue Discussions: This proposal follows the Lower House’s rejection of a low VAT rate increase on sports, culture, and books, prompting the cabinet to explore alternative tax revenue strategies amid broad resistance to tax hikes.
- Single VAT Rate Consideration: The government is also contemplating a single uniform VAT rate of 17-18% to simplify the tax system, but fears that this could increase prices for essential goods like fruits and vegetables have led them to favor a modest increase in the high VAT rate for now.
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