Northern Ireland will see VAT return to a rate of 17.5%, following a temporary reduction of 2.5% this past year.
In the Republic, the .5% drop in VAT announced in the Budget comes into force at midnight.
British Chancellor of the Exchequer Alistair Darling last year announced that VAT was being cut by 2.5%, with the hope that the move would encourage consumers to spend more, thereby boosting the UK's economy.
However, it was only a temporary move - starting on 1 December 2008 and lasting until today - and reaction to its impact has been mixed.
The UK's Centre for Economics and Business research estimates it boosted consumer spending by almost £7bn, while the British Retail Consortium claims its effect has been limited.
Some retailers such as supermarket chains like Tesco, Sainsburys and ASDA in Northern Ireland have decided not to pass on the increased tax to their customers.
Meanwhile, in the Republic the standard rate of VAT will fall to 21% as of midnight.
However, even with that drop and the UK's hike, its newly adjusted rate of 17.5% still compares favourably to the rate in the Republic.
