Govt under pressure to confirm or deny German access to Budget VAT plans
The Government is under pressure to confirm whether it has allowed Germany to inspect the detail of plans to save €3.8bn in the upcoming Budget.
Taoiseach Enda Kenny met Chancellor Angela Merkel in Berlin yesterday after which reports emerged that a 2% VAT increase is on the way in the Budget.
The lower rate of VAT was reduced early this year as part of the Government’s cost-neutral Jobs Initiative to encourage demand in labour-intensive sectors like tourism.
Fianna Fáil finance spokesman Michael McGrath called on Finance Minister Michael Noonan to make a statement to the Dáil on the reported disclosure.
"If this proves to be true, it would be a staggering and unprecedented breach of faith with the Irish people on budget plans," he said.
"It would represent a fundamental breach of established protocols in relation to the disclosure of budgetary measures."
The Reuters news agency reported to have seen a document presented to the budget committee of the German lower house of parliament yesterday which highlighted the increase in the top VAT rate to 23%. It is expected to generate €670m extra in the indirect tax.
Budget 2012 is to be announced on December 6 with ministers traditionally refusing to answer public speculation about tax hikes or spending cuts in advance.
Mr McGrath said the public needed to know what other, if any, budget information has been given to the German government.
"The minister now needs to clarify the precise nature of the budget information which has apparently already been given to German parliament," he said.
"In addition, for what purpose was the information presented to the German budget committee yesterday?"
