Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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332. To ask the Minister for Finance the share of VAT, PSO levy, and other taxes in Irish household electricity bills; and if he will review taxation policy to ease costs for households. [48837/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that domestic electricity is subject to the second reduced rate of Value-Added Tax (VAT) of 9%, which will remain in place until 31 October 2025. Thereafter, the rate is scheduled to revert to 13.5%. VAT currently accounts for approximately 8.3% of the average VAT-inclusive bill.

It should be noted that electricity customers are on a range of tariffs and have differing consumption levels. By way of example, an annual consumption of 4,200 kWh at a VAT-exclusive unit price of 32.87 cent on a 24-hour urban standard meter would result in an estimated average household electricity bill of approximately €1,800 per annum, inclusive of VAT at 9%.

The Public Service Obligation (PSO) levy for the 2024/25 levy year is set at €3.23 per month excluding VAT (€38.76 per year, or €42.25 including VAT), representing 2.1% of the average VAT-inclusive bill. From October 2025, the levy will reduce to €1.94 per month excluding VAT (€23.28 per year, or €25.4 including VAT at 9%), representing 1.3% of the average VAT-inclusive bill while the second reduced VAT rate remains in place.

I am further advised by Revenue that there are no other taxes applied to household electricity bills. Electricity Tax is not charged on domestic supplies. The remainder of the bill comprises wholesale energy costs, network charges regulated by the Commission for Regulation of Utilities (CRU), and supplier operating costs and margins.

In total, VAT and the PSO levy together currently account for approximately 10.4% (VAT 8.3% + PSO 2.1%) of the average household VAT-inclusive electricity bill. Following the PSO reduction in October 2025 and the scheduled VAT increase, this combined share is expected to rise to around 13.1% (VAT 11.9% + PSO 1.2%) of the average VAT-inclusive bill.

The Programme for Government acknowledges the increased energy cost pressures on households and businesses and commits to bringing forward taxation measures to help contain energy costs. In May 2025, Government established the National Energy Affordability Taskforce to identify, assess and implement measures that will enhance energy affordability for households and businesses while delivering key renewable commitments and protecting security of supply and economic stability. This Taskforce will be responsible for drafting an Energy Affordability Action Plan and monitoring its implementation.