The 9 per cent VAT rate currently applied to gas and electricity is to be extended by the Government for a further six months until the end of October.
It means that the rate will not return to its normal level of 13.5 per cent from May 1st as had been scheduled.
A Financial Resolution will be brought to the Dáil this week to provide the necessary legal basis for this extension.
The reduced rate of 9 per cent was first applied from the beginning of May 2022, the first VAT period after it became possible to apply such a reduced rate.
No decision has been made on any further extension which will be considered as part of the normal budget process.
The estimated cost of this extension is €85 million with the net benefit to households over a six-month period likely to be in the region of €26.60 with respect to electricity and €20.28 with respect to gas.
“The Programme for Government acknowledges the increased energy cost pressures on households and businesses, and this extension of the reduced 9 per cent rate is in line with the commitments made in our programme to mitigate these pressures in whatever way we can,” the Minister for Finance Paschal Donohoe said.
“In addition, I am conscious of the fact that energy prices are beginning to increase again and believe in this context that it is appropriate to extend the existing support’.
