Income Tax Page 2 Indirect Taxes

6. INDIRECT TAXES

VAT

In his Budget the Minister announced that the 9% VAT rate for the hospitality and tourism sector will remain in place to 28 February 2023. The Farmers’ flat rate will decrease from 5.5% to 5.0%. This rate compensates unregistered farmers on an overall basis for VAT incurred on their farming inputs. The VAT rate on newspapers and news periodicals will be reduced to zero from 9%. This measure will apply to digital editions of these publications. This change will be introduced from January 2023. The zero VAT rate will now apply to Automatic External Defibrillators, a small number of period products, non-oral Hormone Replacement Therapy medicine and non-oral Nicotine Replacement Therapy medicine. These rate changes will be introduced from 1 January 2023. The 9% VAT rate was previously introduced for gas and electricity on 1 May 2022 and was due to expire on 31 October 2022. This rate has now been extended to 28 February 2023 which will provide for a lower VAT rate from November to February.

EXCISE DUTIES

Tobacco Products Tax The excise duty on a packet of 20 cigarettes is being increased by 50 cents (including VAT) with a pro-rata increase on the other tobacco products. There was no change to excise duty on alcohol products announced. Mineral Oil Tax Excise Reduction Extension Excise rate reductions in the order of 5, 16 and 21 cents per litre VAT inclusive currently apply to Marked Gas Oil, diesel and petrol respectively. These rate reductions are due to expire on 12 October 2022. This measure provides for their extension until 28 February 2023. Special Exemption Order licence fee reduction The excise fees for an application for a special exemption order are being reduced by 50% in support of the night-time economy. The excise fee of €110 per application is reduced to €55. Small Cider Producer Excise Relief Scheme An alcohol excise relief scheme is being provided for small producers of cider and perry. A 50% excise relief will be available on up to 8,000 hectolitres of cider produced by microproducers with an annual production threshold of up to 10,000 hectolitres Microbrewery relief production threshold The qualifying production threshold for microbreweries is being increased to allow the industry more scope to expand. The current production ceiling of 50,000 hectolitres will increase to 75,000 hectolitres.