VAT to be reduced to 21% for six months 

Minister for Finance, Paschal Donohoe said the measures will benefit a "broad range of businesses and traders". Picture: Sam Boal/Rollingnews.ie

A temporary reduction in VAT, which was announced today, will see the tax reduced from 23% to 21% until February 28 2021. 

The measures, which were introduced as part of The July Stimulus comprehensive plan, will impact the tax on adult clothes, footwear, electrical equipment, cars, petrol, diesel, alcohol and tobacco.

It is estimated to cost the Exchequer €440m in total; €160m in 2020 and €280m in 20201. 

Minister for Finance, Paschal Donohoe said the measures will benefit a "broad range of businesses and traders". 

He said the temporary tax reduction will boost sales if businesses pass its impact on to customers, "discretion in relation to the setting of prices charged will remain that of relevant businesses, however, it will help consumer confidence, benefit consumers and generate economic activity if it was passed on to the final consumer.”