Further extension of second reduced VAT rate

The Government has agreed a further six-month extension of the 9 percent VAT rate currently applied to gas and electricity.

The rate was due to revert to 13.5 percent from 1 May 2025 but will now apply until 31 October 2025. The Department of Finance has confirmed that the decision on any further extensions will be considered as part of the normal budget process.

Commenting on this, Minister for Finance, Paschal Donohoe said:
"The Programme for Government acknowledges the increased energy cost pressures on households and businesses, and this extension of the reduced 9% rate is in line with the commitments made in our Programme to mitigate these pressures in whatever way we can.

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."