Dáil Éireann Debate, Tuesday - 29 November 2022
227. Deputy Kathleen Funchion asked the Minister for Finance the estimated cost to the Exchequer of reducing VAT on household energy bills that is gas, electricity and home heating oil to 9% from beginning of January 2023 to the end of April 2023. [59022/22]
View answerI am advised by Revenue that VAT returns do not require traders to separately identify the VAT yield from the supply of specific products or services. Therefore, Revenue does not have exact data from which to estimate the cost of this measure.
However, a tentative estimate using third-party data sources is provided below for gas and electricity.
The Deputy may wish to note that electricity and gas bills are currently subject to the 9% VAT rate until 28th February 2023 so only the cost set out in the table for March and April would represent an additional cost to the exchequer. It is important to note that the Government has very little flexibility on home heating oil from a VAT perspective. This is because it is subject to a VAT rate of 13.5% provided for by way of a historical derogation that allows us to maintain reduced rates to certain supplies under the VAT Directive. These are known as parked rates and cannot go below 12%. It is therefore not possible to apply a reduced rate of 9% to home heating oil.
Reducing VAT rate from 13.5% to 9%: Estimated Cost for 1 January 2023 – 30 April 2023
|
January/February |
March/April |
Total |
|
|
Electricity |
€18.9m |
€18.2m |
€37.1m |
|
Gas |
€7.6m |
€6.5m |
€14.1m |
|
Total |
€26.5m |
€24.7m |
€51.2m |
