We set out below the remaining measures on excise measure, in addition to changes to the Vehicles Registration Tax and Carbon Tax.
Carbon tax rate increase for propellant and other fuels
In line with the trajectory set out in the Finance Act 2020, the carbon tax rate per tonne of CO₂ emitted for propellant fuels will increase from €63.50 to €71, effective 8 October 2025. This revised rate will be extended to all other fuels from 1 May 2026, continuing the Government’s commitment to climate action and emissions reduction through fiscal measures.
The increase forms part of Ireland’s broader environmental taxation strategy aimed at incentivising lower-carbon energy use across sectors.
Extension of Vehicle Registration Tax relief for electric vehicles
The Vehicle Registration Tax (VRT) relief for electric vehicles, originally scheduled to expire on 31 December 2025, has been extended by one year and will now remain in place until 31 December 2026. This extension encourages continued uptake of electric vehicles in line with Ireland’s climate and transport decarbonisation goals.
Excise Duty increase on Tobacco Products
Budget 2026 provides for an increase in excise duty on tobacco products. The duty on a pack of 20 cigarettes will rise by €0.50 (inclusive of VAT). Pro rata increases will also apply across other tobacco products, in line with the Government’s public health objectives and ongoing commitment to reducing tobacco consumption.
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