Minister for Housing, Local Government and Heritage, Darragh O'Brien, has welcomed the government's decision to extend the reduced 9% VAT rate on gas and electricity for an additional six months, until October 31. The lower rate was originally set to revert to 13.5% from May 1.

Minister O'Brien had previously written to Minister for Finance, Paschal Donohoe, advocating for the continuation of the reduced VAT rate to help alleviate energy costs for households. The Programme for Government acknowledges the financial strain of rising energy costs on both households and businesses and has committed to implementing taxation measures to mitigate these pressures, including adjustments to VAT rates.

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In addition, officials from Minister O'Brien's department are in the process of establishing a cross-government Energy Affordability Taskforce. This taskforce will identify and implement measures aimed at improving energy affordability for both households and businesses. The initiative will include short-term interventions ahead of Budget 2026, as well as medium- and long-term strategies to address energy costs more comprehensively.

The extension of the reduced VAT rate is expected to generate estimated savings of €26.60 per household for electricity and €20.28 for gas. Minister O'Brien said that these savings will provide crucial relief to consumers as energy prices remain high. He expressed his full support for the Financial Resolution underpinning the VAT extension.