July 4, 2022

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VAT reduction on fuel ‘not possible’ – Tánaiste Leo Varadkar

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A VAT reduction on fuel is “not possible” following engagement with the EU Commission, Tánaiste Leo Varadkar has told the Dáil.

his comes after weeks of engagement with the Irish Government and the EU Commission to see if it would be possible to cut VAT on fuel down from the current 13.5pc to help with the spiralling costs of living.

He told Sinn Féin’s Pearse Doherty in the Dáil during Leader’s Questions that his proposals to cut VAT are “not possible”.

“In terms of your proposed solution, which you asked us to consider, which is reducing VAT, of course we will consider that, but currently it is not possible

“We’ve had an engagement with the European Commission, the Taoiseach has and the Minister for Finance has. We already have discretionary VAT rate in Ireland, that has one of the lowest VAT energy rates in Europe.

“We’re already down to the lowest possible in terms of excise petrol and diesel and at the moment, if we were to do what you propose it would not be possible, it’s not lawful, not legal.”

He said that a reduction to 12pc now would mean a later increase to 23pc and told Sinn Féin that their proposals are “not possible”.

He was speaking after the Taoiseach told his parliamentary party last night that the carbon hike will go ahead in several weeks, despite opposition from Government TDs in Fianna Fáil and Fine Gael.

Mr Varadkar said that measures to offset carbon tax increases will be brought in before May.

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The carbon tax increase, which kicks in from May 1, will mean an extra €1.50 per month on the average gas bill and extra €20 on the cost of filling a full tank of heating oil, said Mr Varadkar.

Independent TD Mattie McGratht told the Tánaiste that rising electricity prices are a “despicable” and “price gouging”.

He said that he has written to the Taoiseach over increasing costs but that he may as well have written to Santa Claus, or the Easter Bunny, who’s coming next week, “for all the good it did me”.

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