Ireland government weighs VAT cut on energy bills amid soaring prices

The Irish cabinet is examining a possible value‑added tax (VAT) reduction on electricity and gas bills as household energy costs surge. Eurostat data show Ireland’s electricity prices are about 40 % higher than the EU average, with the average household paying roughly €480 more per year.

Minister for Energy Darragh O’Brien briefed the National Energy Affordability Taskforce, which will present options to the cabinet later this month, including a possible extension of the temporary excise cut and further measures in the upcoming Budget. Any VAT cut would need approval from the European Union and could affect funding for new energy‑infrastructure projects, officials said. Sinn Féin leader Mary Lou McDonald has called for an emergency budget, while Taoiseach Micheál Martin warned that extra spending could fuel inflation.

The government is balancing immediate relief for consumers against fiscal constraints and the need to maintain investment in the energy sector.