Pa Daly (Kerry, Sinn Fein)
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403. To ask the Minister for Finance the estimated cost of reducing the VAT on electricity to 5%; the cost of reducing the VAT on gas by 5%; the cost of reducing the VAT on electricity to 6%; the cost of reducing the VAT on gas by 6%; the cost of reducing the VAT on electricity to 7%; the cost of reducing the VAT on gas by 7%; the cost of reducing the VAT on electricity to 8%; and the cost of reducing the VAT on gas by 8%, in tabular form. [29640/25]

Pa Daly (Kerry, Sinn Fein)
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404. To ask the Minister for Finance the first- and full-year cost of reducing the VAT on electricity to 9%; and the first- and full-year cost of reducing the VAT on gas to 9%, in tabular form. [29641/25]

Pa Daly (Kerry, Sinn Fein)
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405. To ask the Minister for Finance to provide a breakdown of the VAT earned on electricity in each of the years 2015 to date; and to provide a breakdown of the VAT earned on electricity in each of the years 2015 to date, in tabular form. [29642/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 403, 404 and 405 together.

The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law is obliged to comply. The Directive requires each Member State to maintain a standard rate of VAT, and permits a Member State to apply up to two reduced rates of VAT. On this basis, Ireland applies a standard rate of 23%, and two reduced rates of 13.5% and 9%.

In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within the certain listed categories to which Member States may apply a lower rate. The supply of electricity and gas is one of the categories listed in Annex III of the Directive to which a Member State may choose to apply a reduced VAT rate of not lower than 5%. There are various rules under the Directive regarding the structure of VAT rates that a Member State applies and strict limits on the number of categories to which a Member State can apply its reduced VAT rates.

Any proposal to apply one of Ireland’s reduced VAT rates to these supplies would need to be considered in the context of the annual Budget, and having regard to the limits on the number of categories to which the reduced rates can be applied.

I am advised by Revenue that, from 1 May 2022, the VAT rate applied to electricity and gas is set at the second reduced rate of 9%. This rate is scheduled to revert to the reduced rate of 13.5% after 31 October 2025. For the purposes of costing the Deputy’s proposed measures, it is assumed that the temporary application of the second reduced VAT rate of 9% on electricity and gas will revert to the reduced VAT rate of 13.5%.

I am also advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible to provide a costing for the measures outlined above using information provided on tax returns alone.

In relation to PQ 29640, using third party data sources, a tentative estimate of the full year cost of reducing VAT from 13.5% on electricity and gas is provided in the table below:

** Up to and including May 2025.