Telecommunications Industry Ireland urge VAT reduction to achieve National Connectivity Strategy

Telecommunications Industry Ireland (TII), the Ibec representative body for the electronic communications industry in Ireland, is urging the Government to take immediate, practical steps to ensure that Ireland meets its 2028 Digital Connectivity Strategy targets. These measures are crucial for maintaining Ireland's competitive edge in European and global markets. TII’s members account for virtually all of the telecoms sector’s investment and employment, as well as providing critical essential services to every household and business in the country, and to public and emergency services.

In its Budget Submission 2025, TII outlines the practical measures needed from Government to ensure a competitive, sustainable future for Ireland’s telecommunications industry. The sector employs 24,000 people with an annual payroll of €1.6 billion. It has invested approximately €3.5 billion in the network over the past 5 years and pays €2.7 billion annually to suppliers in Ireland for goods and services.

Telecommunications Industry Ireland’s summary recommendations for Budget 2025 are:

1. Reduce the VAT rate for internet access services delivered over fibre and 5G FWA from 23% to 13.5% to help achieve the National Connectivity Strategy of promoting fibre and 5G
2. Extend the Trading Online Voucher Scheme to incentivise SME take-up of very high-capacity networks (fibre and 5G FWA)
3. Fund a fit for purpose mobile public warning system as done in Denmark, France, Germany, Spain, and the UK
4. Use spectrum fees and receipts from spectrum auctions collected from industry to fund a reduction in mobile coverage ‘blackspots’ by building open access neutral host telecommunications infrastructure available to all mobile operators in areas where such infrastructure is not commercially viable, beginning with a 9 site pilot project costing c.€5 million
5. Fund a multiannual plan to increase the security of Ireland’s subsea cables in line with EU policy

Torlach Denihan, Director of Telecommunications Industry Ireland, said:

“Telecommunications is the backbone of Ireland’s digital economy, providing the significant network investments that enable our digital future. We urgently call for a reduction in the Budget in the VAT rate on internet access services delivered via fibre and 5G Fixed Wireless Access from 23% to 13.5%. This reduction is not just a fiscal adjustment but a critical step in ensuring that the benefits of very high-capacity networks are spread as widely as possible.

As businesses and communities increasingly rely on internet services, especially in rural areas, this move is vital to help bridge the digital divide and to drive further investment in telecommunications infrastructure, thus retaining our competitive edge and making Ireland a leader in digital connectivity and the associated economic and social benefits. With 270,000 people employed in digitally intensive sectors and about 30% of the EU’s data hosted in Ireland, this progress would be impossible without advanced, competitive telecommunications.

“As industries digitise and AI adoption accelerates, data traffic will surge exponentially. For Irish businesses to capitalise on these opportunities, a thriving telecoms sector must continuously upgrade infrastructure—like fibre and masts—to support the very high-capacity networks essential for remote working, online education, and leisure activities, as well as to continue providing vital public and emergency services.”