Cut in VAT on energy among proposals set to be considered by Cabinet

The three party leaders in the coalition Government met on Monday to discuss further measures to be taken to curb the rising cost of living.
Cut in VAT on energy among proposals set to be considered by Cabinet

By Dominic McGrath, PA

A plan to temporarily cut the VAT rate on energy from 13.5 per cent to 9 per cent is among the proposals set to be brought to Cabinet on Wednesday.

The three party leaders in the coalition Government met on Monday to discuss further measures to be taken to curb the rising cost of living.

It is understood that one of those proposals is cutting the VAT rate on gas and electricity to 9 per cent, while a plan to introduce three weeks additional payment of the fuel allowance is also being considered.

Finance Minister Paschal Donohoe was involved in setting out some of the measures that were considered by the party leaders.

Taoiseach Micheál Martin, Tánaiste Leo Varadkar and Green Party leader Eamon Ryan met on Monday.

A Department of Finance spokesperson said: “Minister Donohoe outlined measures for consideration by the party leaders this evening.

“Further work will now take place in advance of a cabinet meeting.”

National Home Energy Upgrade Scheme
(left to right) Minister for the Environment Climate and Communications Eamon Ryan, Taoiseach Micheál Martin and Tánaiste Leo Varadkar met to discuss fresh measures to tackle the cost of living (Niall Carson/PA)

If approved by Cabinet, the measures would be the latest in a series of attempts by the Government to defray the cost of rising inflation and the growing burden on households.

The Government has already attempted to mitigate the impact of inflation with a range of announcements, including a cut to excise duty on fuel and providing households with a €200 energy rebate.

Opposition parties have repeatedly urged the Government to go further in response to the crisis, worsened by the impact of the war in Ukraine.

On Friday, Mr Varadkar said that further action to deal with inflation and offset the planned increase in carbon tax would not amount to a “big bazooka measure”.

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