Helen McEntee (Meath East, Fine Gael)

I move:

(1) THAT the rate of value-added tax chargeable on the supply of electricity provided for by section 46(1)(caa) of, and paragraph 17(2) of Schedule 3 to, the Value-Added Tax Consolidation Act 2010 (No. 31 of 2010) and the supply of gas provided for by section 46(1)(caa) of, and paragraph 17(3) of Schedule 3 to, that Act, being 9 per cent until 31 October 2025, be extended until 31 December 2030 and that section 46(1)(caa) of that Act be amended accordingly.

(2) THAT this Resolution shall have effect on and from 8 October 2025.

(3) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

This resolution provides for an extension in the temporary reduction in VAT on gas and electricity at an estimated cost of €254 million per year. At present, gas and electricity have a 9% VAT rate applied on a temporary basis until 31 October this year. This rate is due to revert to 13.5% from 1 November. This temporary reduction, introduced in May 2022, was one of the Government's responses to the current energy crisis and its impact on the cost of living. While inflation has eased and global energy prices have dropped, I believe it is appropriate to provide an extension to this measure. For many people, the cost of living remains relatively high, so the Government is proposing this extension from 1 November this year until the end of 2030. The cumulative cost of the measure since its introduction is estimated to be €746 million.

As Deputies will recall, the background to this measure is that up to April 2022, Ireland maintained a historical derogation in respect of VAT rate on gas and electricity of 13.5%. This derogation was necessary as, otherwise, the standard rate of VAT of 23% would have applied. However, following the amendment to annexe III of the VAT directive in 2022, it was expanded to include gas and electricity. This meant that Ireland could apply a reduced rate of 9% to these products in line with other goods and services to which a reduced rate applies and that is exactly what we are doing here for the next five years.

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