We knew it was coming but quite how much has been something of a mystery since the start of the general election. But now that the coalition government is in place, the business of recovering the British economy begins in earnest.
Economists have warned though, that they may be forced to impose £50bn worth of tax rises after only a few months in the job. A panel of economists who are regularly consulted by the Treasury, put the chances of a 20 per cent VAT rise at odds-on while others say that the VAT increase will raise only a fifth of the revenue needed.
In fact, the three-person independent committee currently assessing the grave matter of the country's deficit may urge the Government to attempt a £5bn tax rise.
On top of the 20 per cent VAT, that looks like adding a whopping 9.5p on the basic rate of income tax.
Jonathan Loynes of Capital Economics told The Telegraph: "Tax increases eventually worth £50bn or more may be needed, at least some of which may be implemented in the emergency budget."
Increasing VAT to 20 per cent would bring British sales tax in line with other European countries but, where shoppers are already cutting their spending, it will be bad news for the high street.
During the uncertainty of last weekend, high street chains recorded sales falling by double figure percentages and the VAT rise will nothing to entice them back.
So will the tax rises dig us out of the financial quagmire or further frighten shoppers away from retailers?