Taoiseach Leo Varadkar has confirmed that the Government will explain next week how temporary tax measures will be “phased out” for the rest of the year.
As cost of living talks continue over the weekend ahead of next Tuesday’s Cabinet meeting, it is now widely expected that the 9% VAT rate for the hospitality industry will increase to 13.5% as planned.
Other tax measures currently in place that are due to expire at the end of the month include excise duty cuts on petrol and diesel, as well as VAT cuts on electricity and gas.
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Speaking in Limerick on Friday afternoon, the Taoiseach said that the final cost of living package has not been agreed.
Mr Varadkar acknowledged that while inflation appears to have peaked, prices are not coming down. While he stressed that the “most vulnerable” such as those on fixed incomes, social welfare and pensioners will be supported, the Government will not be able to continue all of the supports currently in place.
He said: “I need to be frank with people as well. This isn't going to be a budget or a mini-budget. The €11 billion that we deployed in the last budget, that's only a few months ago, those measures are still being rolled out.
“The temporary tax cuts that were put in place, they are temporary and they will need to be phased out over the course of the year. We'll be setting out how that's going to be done.
“We did a number of temporary tax cuts. They were temporary. We always said they were temporary, in relation to VAT on hospitality, also electricity and gas, also on excise on petrol and diesel.
“We were always very clear that they were temporary. They're not budgeted for and they do have to be phased out.
“We will set out, I believe on Tuesday, how they can be phased out.”
Mr Varadkar later stressed that there will be continued support for small businesses with high energy costs, indicating that the Temporary Business Energy Support Scheme (TBESS) will remain in place.
He also reiterated that vulnerable people will be supporters.
He added that people have not yet received the last €200 energy credit and this will be applied to people’s bills in March and April.
The Taoiseach, Tánaiste Leo Varadkar, Green Party Eamon Ryan, Finance Minister Michael McGrath, Public Expenditure Minister Paschal Donohoe and Social Protection Minister Heather Humphreys met on Thursday evening to discuss the cost of living measures.
Several sources told the Irish Mirror that there was “no decision taken” and any agreement was a “while off”.
It is widely believed that there will be a number of once-off or lump sum payments for those on social welfare, with at least one universal measure.
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