VAT on food and leisure attractions on the Isle of Man is to be reduced to 5% next week, the government has said.
It brings the island's rates into line with changes announced by the UK Chancellor on Wednesday.
The reduced rate, from 20% to 5%, comes into force on 15 July for six months.
The changes were designed to "stimulate business in the hospitality sector" following the lifting of coronavirus lockdown restrictions, a government spokesman said.
The move was "in line" with the island's customs and excise agreement with the UK, he added.
Measures to control the spread of the virus, which include the closure of the island's border and the cancellation of the TT races, have impacted many businesses that rely on the island's tourist trade.
VAT on holiday accommodation already stands 5% on the island.