Nobody likes VAT increases and the retail sector is under pressure at present. However, much of that to which the 21% VAT rate applies is imported whereas the 13.5% rate applies to the newspaper industry, the building industry and the food section of the hospitality industry, which includes restaurants, bars and so on. All of those sectors are very high employers in the economy. If the Government is looking at supply side initiatives across sectors to get the economy moving and create more jobs, a restructuring of VAT rather than an increase is the better way to do it.

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