Last week, the Government announced further measures to help with the rising costs of energy, including:
- VAT on gas and electricity will be cut from 13.5 percent to 9 percent from 1 May until the end of October (at a cost of €46 million)
- Excise reduction on petrol (20c per litre), diesel (15c per litre) and green diesel (2c per litre) will also be extended to Budget Day (at a cost of €80 million)
- 370,000 fuel allowance recipients will receive a €100 lump sum (at a cost of €37 million)
- A further reduction in the excise levy on marked gas oil (green diesel) of 2.7c per litre.
The above measures are in addition to the cost-of-living measures of €2 billion announced as part of Budget 2022 or brought in since. The Institute wrote to the Government in February recommending that they investigate the possibility of reducing the VAT rate on energy costs to 9 percent.
Commenting on the above measures, Minister for Finance Paschal Donohoe noted:
"The government is acutely aware of the impact that rising prices are having on citizens and businesses right across the country. That is why we have responded with a series of measures over recent months at a cost of close to €2 billion.
"Today, the government has agreed to reductions in the rate of VAT from 13.5 percent to 9 percent on the supply of gas and electricity for a temporary period from 1 May until 31 October costing an estimated €46 million. This will result in savings of €50 on an annual gas bill and €70 on an annual electricity bill.
"This measure is being introduced to offset the increase in carbon tax which will take effect from 1 May.
"A further reduction in excise duty on Marked Gas Oil by 2.7 cent and an extension to the period at which the reduced excise on petrol, diesel and marked gas oil applies to Budget Day will benefit all households, businesses and our farming sector."
The full release can be read at www.gov.ie.