Budget 2026: 9% Vat rate on gas and electricity should remain – Jack Chambers 

Public expenditure minister said the 9% rate should be retained to prevent further price hikes for consumers

The call to keep the 9% rate comes after price hike announcements from energy companies SSE Airtricity, Bord Gáis Energy, Pinergy, Flogas, and Energia. Stock picture

A 9% Vat rate on gas and electricity should be retained in October’s budget to prevent further price hikes for consumers, public expenditure minister Jack Chambers has said.

Mr Chambers said the Government had previously extended the lower Vat rate in April, with it due to expire next month. He said: 

I think in the context of the rising energy bills that many families are facing, that that should continue all through next year.

“I think it’s important, when people are feeling that pressure, that we take account for that in terms of our overall taxation decisions.

Speaking on RTÉ radio, he confirmed it was being considered as part of finance minister Paschal Donohoe’s tax package.

The Government’s Tax Strategy Group has estimated the total cost of retaining the lower Vat rate is €193.3m — €58.2m for gas and €140.1m for electricity.

In recent years, the cut has mainly been on a six-month rolling basis, with each extension providing estimated savings of €26.60 on electricity and €20.28 on gas for consumers for the duration of the period.

Flurry of energy price hikes 

The call from the public expenditure minister comes after a flurry of announcements from energy companies in recent weeks that they would be hiking their prices.

On Friday, SSE Airtricity confirmed it would be increasing its unit rates and standing charges by 9.5% from October 20, with customers to expect an average of €151 added to their annual bills.

Other companies such as Bord Gáis Energy, Pinergy, Flogas, and Energia have all announced price hikes as the winter months set in.

Proposed 9% Vat hospitality rate 

Mr Chambers was also questioned about the proposed hospitality Vat rate cut from 13.5% to 9% and whether it would be applied to large fast-food operators.

“It’s a universal application across the hospitality sector,” he said.

“I expect if the change is made, as it was before, it will apply to all of the hospitality sector.”

He added that it would be up to restaurants to choose whether or not to cut prices in response to the Vat cut.

“I think it’ll be dependent on each individual restaurant, they are facing significant cost pressures, and I think where they can, they should [reduce prices],” he said.

Mr Chambers said he was aware of the high input costs faced by restaurants, amid a “volatile” global supply chain for materials and produce.

“I would encourage any of them, if [a 9% VAT rate] is introduced, that they should be competitive.”

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The budget is set to be unveiled on October 7, with ministers taking part in their annual bilateral meetings with the finance and public expenditure ministers.

Justice minister Jim O’Callaghan is understood to be seeking extra resources to hire additional immigration officers to process asylum applications quicker.

“You don’t want to be waiting two years for [asylum] decisions,” one source said.

He is also seeking additional funding towards Garda recruitment and expanding the existing capacity of prisons.

In Budget 2025, there was funding allocated to recruit a further 1,000 trainee Gardaí and 150 civilian staff.