Businesses across Europe are being charged more in indirect taxes as governments move to find alternative streams of revenue during the downturn, a new KPMG report states.

The recession has seen indirect taxation increase across Europe, mainly in VAT, which has risen from an average of 19.5 per cent last year to 19.8 per cent across the Continent in the past year.

The Irish VAT rate is one of Europe’s highest at 21.5 per cent following a rise of 0.5 per cent in the 2009 budget.

The European trend contrasts with Asia-Pacific countries, where indirect tax dropped marginally from 10.9 per cent to 10.8 per cent.