Taoiseach dismisses proposal to waive VAT on energy bills

Sinn Féin president Mary Lou McDonald called on Taoiseach Micheál Martin to engage with the EU Commission and to temporarily waive VAT on energy bills for a period of three months.

Taoiseach Micheál Martin has dismissed proposals from Sinn Féin for a temporary waiver of VAT on energy bills, insisting it “cannot be done”.

Sinn Féin president Mary Lou McDonald called for a temporary three-month waiver of VAT on energy bills in response to spiralling costs.

During leaders’ questions, Ms McDonald said there were things that could be done to ease the burden in the run-up to Christmas.

She called on Taoiseach Micheál Martin to engage with the EU Commission and to temporarily waive VAT on energy bills for a period of three months.

“I want to put it to you again that this is a common-sense intervention that would make a real difference. It's something that's already implemented by others in the EU seeking to protect their people from these energy hikes. So I'm asking again, Taoiseach, will you now waive VAT on energy bills for three months and give workers and families a real break?” she said.

Mr Martin said while Ms McDonald’s proposed solution sounded good, it could not be done. He said under EU rules, a zero-rate cannot apply.

“I'm informed and advised that under EU rules that our reduced rate of VAT cannot be reduced below 12%. If we were to attempt to reduce the weight to say 9%, and we looked at all this for a few months, the VAT rate would afterwards have to revert up to the standard rate of 23%,” he said.

Having had her proposals shut down, Ms McDonald came back and called on the Taoiseach to tell her what his proposals were.

“If my ideas aren't runners that what's your idea? What will you do for families and for businesses now?” she asked.

Mr Martin said political leaders have a “duty in here to be honest with people and not put forward ideas or proposals that do not carry any credibility or can't be done”. 

Antigen testing

Social Democrats co-leader Róisín Shortall, in her contribution, said the Government's approach to antigen testing is just not good enough. In the midst of a fourth wave of the virus after two years, our health services clearly under enormous ongoing pressure, she said.

“We were all under the impression the Cabinet would agree a scheme yesterday but incredibly it's been reported the cabinet didn't even discuss Covid yesterday,” she said.

She called on the Taoiseach to clarify the Government’s position on antigen testing and what level of subsidy was likely.

Mr Martin said he wanted to take the opportunity to thank the Irish people for responding to the current situation.

He said all of the research was indicating particularly in the last week or two that people are adjusting behaviour quite significantly, which is ultimately the way to reduce the coordinate pressure on hospitals and in relation to Covid-19.

The Taoiseach said he was a supporter of antigen testing and the past six months had seen much greater use of them.

Ms Shortall said the delays in agreeing the subsidy for antigen tests were not acceptable.

“There's a real urgency about this – we're in the midst of an emergency. People want to use all of the tools available to them. And you have to be supporting people to do that. It's not only about personal responsibility, it's ensuring that your Government plays its part as well,” she said.

Mr Martin accepted the Government did have to support people. 

“And we are right across the board. We have seen a pretty significant expansion of the PCR testing, for example, 210,000 in the last week. That’s one part of it. There's not one silver bullet,” he said.