Liz Truss to consider 5% VAT cut if she becomes Prime Minister of UK -Telegraph

To combat the cost-of-living crisis, British leadership candidate Liz Truss is considering a 5% reduction in value added taxes (VAT) across the board if she is elected prime minister, according to the Telegraph on Saturday.

 

According to the Telegraph, Truss’s leadership campaign is contemplating the concept as a ‘nuclear’ option, with other choices including a 2.5% decrease in VAT from the current standard rate of 20%.

 

According to an estimate by the Institute for Fiscal Studies think tank, a 5% VAT drop would save the average household more than 1,300 pounds ($1,527) per year while costing taxpayers 3.2 billion pounds each month.

 

Separately, the Times reported Truss was mulling an emergency reduction in income taxes and VAT. According to the article, some of her supporters believe that the personal allowance, the rate at which people begin to pay income tax, should be increased.

 

The British government has been under increasing pressure to provide urgent financial assistance to homeowners, with energy costs scheduled to rise by 80% to an average of 3,549 pounds per year beginning in October.

 

Soaring energy prices, exacerbated by Russia’s invasion of Ukraine, have drove British inflation to 40-year highs, but the government’s response has been hindered by the race to replace Johnson, which is scheduled to end on September 5.

 

The administration has stated that it is considering proposals for a cost-of-living assistance package for consideration by the future prime minister.

 

According to the Telegraph, Truss’ campaign is considering extending a 5-pence drop in gasoline duty.

 

‘Liz would investigate ways to help people,’ a Truss campaign source said, ‘but it would not be proper for her to reveal her intentions before she has even been elected Prime Minister or seen all of the facts.’

 

Truss has stated that she supports tax cuts to stimulate the economy. Rishi Sunak, her leadership candidate and former finance minister, has promised more direct assistance to people battling with rising energy expenses.

 

‘Whoever succeeds me next month, the Government will unveil another massive package of financial help,’ Johnson wrote in a piece for the Mail on Sunday.