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“Mostly essential items are zero rate tax. If they are taxed so will create additional burden to less well-off.”
What is meant by second sentence here?I think it means if they were taxed at normal rate it would increase cost of essential goods such as basic foods to lower income/wealth people. Hope this helps.
Quite correct. In addition VAT is a regressive tax meaning that it impacts more on less well-off people. If someone spends £1,000 (before VAT) on food in a period. If food were standard rated at 20% then their costs would increase by £200. If the person had a salary for the period of £2,000 then the extra £200 is a lot (10% of income) compared to its effect on someone earning £5,000 (4% of income).
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