On 25/11/2008, David Sullivan <[EMAIL PROTECTED]> wrote: > Lanzarote (part of Spain) VAT 5%, income tax 5%, > booze tax nil (AFAIK). You can buy a litre of 37.5% > rum for euros 4.99. Surprisingly (?) rather a lot of > Brits have retired there. No canals, though. >
It must have some special exemption for being a remote island. There is a 15 per cent minimum VAT rate across the EU with a limited list of items (such as fuel and childrens' clothes) that have a 5 per cent minimum and another list of things that can be entirely exempt (such as books and newspapers). Looking at how expensive the temporary cut in VAT is, it's not surprising that many countries have high rates. It raises lots of cash - and is hard to avoid. And although it's much less progressive than taxes on income, it seems less politically difficult. If I were being controversial I might say that this is possibly because those who own and write for newspapers would lose from a progressive tax system. -- Nigel Stanley
