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Tánaiste Signals Cut In Home Heating Oil In Budget

By Dalton Mac Namee
12/09/2026
Est. Reading: 3 minutes

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The Tánaiste has indicated that the Government will cut tax on home heating oil in the Budget.

In a recent interview with RTÉ Radio, Mr Harris said that people need clarity on energy prices and that the upcoming Budget will illustrate this.

He went on to state that there are two ways for the Government to achieve this.

One way, is by lowering the tax on kerosene. This is to be introduced as legislation by Sinn Féin in the Dáil next week.

The other way is to equalise the VAT rate charged on home heating oil, which currently stands at 13.5%, with the 9% levied on gas, the latter having been proposed by the industry group, Fuels for Ireland.

Mr Harris is also set to commit to increasing the threshold at which workers pay at a higher rate of income tax in each of the next four budgets.

"I think it's really important that we recognise that there's lots of people, who are working really hard and finding that they're still just about getting by, let alone getting ahead," he said.

"It's really important that we make sure that the tax system helps them, that work always pays, that as they perhaps do a few extra hours, as their wages rise, as they do some overtime, as their career progresses, they're actually seeing the benefit of that in their own pay package". 

"If we don't actually look at the fact that people in Ireland are still paying the higher rate of tax, below the average earnings in this country, we're going to continue to see this unfairness for middle income earners". 

"The tax policy that this Government will pursue will be around tax bands and tax credits ... If we can continue to run the economy well, I believe we can make progress in this Budget, but also anchor income tax policy really for the next four". 

No income tax! No VAT!

Simon Harris stated that everybody paying tax will benefit under these new plans.

"Under our plan, everybody who pays tax will benefit. But we do have to be conscious that there's a pinch point of people who don't benefit from anything in the social welfare system, that they never apply for or qualify for a government grant," he said.

"Sometimes the only way you can somewhat give them a bit of breathing space is actually directly through the tax system", he added. "I think the bands recognising that middle income earners are still paying the higher rate of tax in this country, plus the credits, is a fair way to proceed". 

He said that the income tax budget would be both modest and meaningful for people, following the warning to the former by Public Expenditure Minister, Jack Chambers.

"Both can be true. I think they can," he said. "I think anybody who sees a tax benefit of several hundred euro, I don't think they'd see that as modest. I think they'd see that as helpful". 

"I'm talking about delivering a tax package that will assist people by several hundred euro". 

Following Mr Harris' comments about the Government's commitment to increasing the threshold at which people pay a higher rate of tax, Minister Jack Chambers said that the tax package provided by this budget will be "moderate overall". 

Speaking at the annual conference of the Dublin Economic Workshop in Wexford, where he was asked about the increase in the oil prices ahead of this budget, Mr Chambers said the social protection will be used to target those on lower incomes affected by higher fuel prices.

He added that he wanted to see smaller levels of increases in day to day spending by Government departments compared with previous years.

Mr Chambers said in the "next number of days" the Government would move to take action to "centralise controls" from some regions within the Health Service Executive.

"They have had very poor budgetary management, very poor financial management and have had complete lack of control in oversight the budget they have been allocated," he said.

He insisted that he and Minister for Health, Jennifer Carroll McNeill were "at one" when it comes to bringing tighter controls on spending. This comes as the latest Exchequer Returns indicate that the Department of Health were set to show its largest overspend in 10 years.

He said that there was a major campaign to raise the €40,000 tax free threshold for nieces and nephews who inherit money, and that equalising that with the €400,000 tax free threshold for sons and daughters "would cost hundreds of millions of euro". (All quotes according to RTÉ).

Written by Dalton Mac Namee

Dalton Mac Namee is a content writer for Nova.ie and a freelance GAA reporter from Louth, Ireland.

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