Economics
Sunak Faces a $161 Billion Gamble: a Tax Cut That Might Not Work
- Lowering VAT would do little to help U.K. consumers: studies
- A 1% reduction would cost Treasury 7 billion pounds a year
This article is for subscribers only.
Cutting a lucrative tax on sales could prove a costly gamble for U.K. Chancellor of the Exchequer Rishi Sunak should he choose to deploy a stimulus measure last used in the depths of the financial crisis.
Speculation has been mounting that Sunak may reduce the main rate of value-added tax from the current 20% as early as next month to help kick start the economy in the wake of the coronavirus pandemic. An emergency cut is among many measures being considered by the Treasury, according to a person familiar with the matter, who suggested that decisions haven’t yet been taken.