Germans angered by plans to hike VAT

Germany’s plans to increase VAT at a time when tax revenue is expected to
soar has prompted a popular outcry.

According to a bi-annual tax receipt estimate compiled by government and
private sector experts, tax receipts are 8.1bn euros (£5.5bn) higher than the
last forecast six months ago.

The government is eager to increase VAT anyway, prompting harsh criticism
from the German press and economists, the FT reports.

The country’s chancellor, Angela Merkel, has orchestrated the proposed VAT
increase and was forced to defend the idea yesterday, saying that the change was
essential if Germany was to abide by Europe’s fiscal rules.

‘I know this government is asking a lot from the people in this country with
some decisions it has taken in recent day. Our credibility in relation to what
we expect from other member states in Europe is a precious good,’ said Merkel.

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