Electricity subsidy and zero VAT on essential goods scrapped

The electricity subsidy and zero per cent VAT on 11 essential goods will be scrapped as of October 1.

The measure in place from March 2023 until October 2024 has come at a €201 million cost, the finance ministry said.

With inflation expected to stabilise at two per cent and energy costs going down, coupled with significant drops in fuel prices, the state intervention is no longer necessary and should be avoided for extended periods of time, it said.

The state subsidies are set to expire on September 30, meaning consumers will be paying full electricity prices.

With the zero per cent tax scrapped, there will be five per cent on VAT for bread, milk, eggs, baby food, women’s hygiene products, baby and adult diapers, sugar, coffee, meat and vegetables.