After months of stasis under a caretaker prime minister, the UK finally has a new one, Liz Truss, and with her, a new chancellor of the exchequer in the form of Kwasi Kwarteng. For better or worse, this administration has promised to deliver sweeping reforms to UK finances. Cutting taxes to the tune of over £30 billion ($34 billion) was one of Truss’s flagship policies in the hard-fought leadership contest.
Given rising inflation and sky-high energy costs, the new cabinet must act quickly and decisively. A key measure reportedly in consideration for the upcoming “mini-budget” on Sept. 23 is a temporary cut to value-added tax.
The UK government is not alone in its plans to tinker with indirect taxation. As the entire European continent braces for a long, hard winter, many EU countries have axed VAT on energy. Some have gone a step further, with Germany renewing a cut to VAT on hospitality services into 2023, and Poland cutting VAT on food until the end of the year.
Source Bloombergtax
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