On the march

In a stark warning to all countries facing spiralling debt Latvia Lithuania Estonia and Croatia are all imposing further VAT increases to help shore up their faltering finances.

They join other countries such as Ireland and Hungary which have been forced into recent crisis VAT hikes with a number of western countries seemingly certain to follow. This includes the UK which may be looking at 20% VAT within the next two years.

Globally more and more countries are looking at VAT to solve their fiscal problems. This is particularly notable in the US where President Obama’s healthcare reform may be the spur to push through VAT implementation.

Progressive tax regimes crushed

All three Baltic former Soviet states had undertaken extensive reforms in their financial systems. This included introducing various flat-rate tax systems where income corporate and VAT rates...