The government is set to increase the top rate of sales by 2% in the forthcoming budget. The rest of the €1bn target will be made up from indirect taxes.
Ireland is committed to making budgetary adjustments of 3.8 billion euros for next year under its EU/IMF bailout and Finance Minister Michael Noonan has said he will not reveal the exact measures until he presents the budget on December 6.
But based upon the document which was presented to the budget committee of the German governments lower house on November 16th. VAT will be raised to 23% to give the exchequer added revenue of €670m.
“After successive budgets in which income tax burdens were raised significantly, we have decided to focus on indirect tax increases to deliver the bulk of the 1 billion euros additional tax effort required in 2012,” the document said.