The Taoiseach has today defended the decision to add another 2 per cent on to VAT in the upcoming budget.
Earlier today, Micheál Martin called for the planned increase to be reversed. At the party's national councillors’ convention in Mullingar, he said: “The single most important ingredient that we are missing at the moment for economic recovery is consumer confidence. Until this week, all strands of political thought were agreed on this.
“Yesterday, Michael Noonan shattered this consensus by hiking tax on the very activity that we all want to encourage.
"The Government still has time to think again on this issue and reverse the decision. I am calling on the Taoiseach to listen, to show leadership, and say ‘No’ to Michael Noonan," the Fianna Fáil leader said.
However, Enda Kenny said there was a need for "political choices that are unpalatable". He said that, unlike an income tax increase, people would have a choice in relation to VAT in terms of choosing what to buy.
The Minister for Finance has promised the higher rate of VAT will not be increased again “in the lifetime of this Government” following a 2 per cent increase in next month’s budget.
Mr Noonan described the release of the Government’s budgetary plans to German politicians as “disappointing” but confirmed that the top rate of VAT will increase in budget 2012.
Mr Kenny said the VAT hike had been agreed in negotiations with the EU-ECB-IMF troika in return for a freeze on income tax rates. But he insisted it was only a proposal.
However, speaking later, Mr Noonan confirmed his intention to increase VAT next month. “We have quarterly reviews every time the troika is in Dublin and this is confirmed in a formal document which is signed by the Minister for Finance and the governor of the Central Bank,” he said.
“The document which was leaked was a preliminary draft of this document but it also contained, at the request of the commission, indications of what we might do in the budget.”
Earlier today, Micheál Martin called for the planned increase to be reversed. At the party's national councillors’ convention in Mullingar, he said: “The single most important ingredient that we are missing at the moment for economic recovery is consumer confidence. Until this week, all strands of political thought were agreed on this.
“Yesterday, Michael Noonan shattered this consensus by hiking tax on the very activity that we all want to encourage.
"The Government still has time to think again on this issue and reverse the decision. I am calling on the Taoiseach to listen, to show leadership, and say ‘No’ to Michael Noonan," the Fianna Fáil leader said.
However, Enda Kenny said there was a need for "political choices that are unpalatable". He said that, unlike an income tax increase, people would have a choice in relation to VAT in terms of choosing what to buy.
The Minister for Finance has promised the higher rate of VAT will not be increased again “in the lifetime of this Government” following a 2 per cent increase in next month’s budget.
Mr Noonan described the release of the Government’s budgetary plans to German politicians as “disappointing” but confirmed that the top rate of VAT will increase in budget 2012.
Mr Kenny said the VAT hike had been agreed in negotiations with the EU-ECB-IMF troika in return for a freeze on income tax rates. But he insisted it was only a proposal.
However, speaking later, Mr Noonan confirmed his intention to increase VAT next month. “We have quarterly reviews every time the troika is in Dublin and this is confirmed in a formal document which is signed by the Minister for Finance and the governor of the Central Bank,” he said.
“The document which was leaked was a preliminary draft of this document but it also contained, at the request of the commission, indications of what we might do in the budget.”
