23% TO BE ADDED TO COST OF FOOD SUPPLEMENTS
The Revenue Commissioners announced in December of last year that VAT should be applied on all food supplements from the 1st of March this year (2019). This is a 23% increase on the 0% rate at which food supplements have been sold in Ireland for the past 40 years. The health products industry considers it totally inappropriate to tax foodstuffs with beneficial effects on health in this way and is warning that the sudden imposition of 23% tax on this important food category will have a serious and lasting impact on people’s health and on businesses across the country.
Historically, food supplements have been treated as foods for VAT purposes and have availed of the concessionary 0% rate applicable to foods in Ireland for over 40 years. However, since 2011 the Revenue Commissioners have been questioning whether all food supplements should be entitled to the concessionary rate. In December of last year they asked the Minister to apply a reduced rate of VAT on all food supplements in the Budget, but the Minister decided to take advice on the matter before potentially legislating in the next year’s Budget; whereupon the Revenue Commissioners decided that they would under their own cognisance apply the standard rate of VAT (23%) on all food supplements from the 1st of March.
The Health Product Industry considers that that it is not acceptable for any institution of the State to take unilateral action of this nature when the Government has stated that it is considering legislation on a matter, and is calling on the Revenue Commissioners and the Government to defer this decision to allow the Government to legislate as it deems appropriate. The industry is also calling on the Government to ensure that whatever steps they take will recognise the legal status of food supplements as foods under EU law, will involve appropriate consultation with the industry, and most importantly will respect the choices that consumers make when using food supplements to manage their health.
Food supplements are concentrated foodstuffs with nutritional and physiological effects, including vitamins, minerals fish oils, probiotics and a wide variety of plant preparations. They are widely used for the health benefits, for instance:
- To avoid deficiencies in essential nutrients (e.g. vitamin D, folic acid and iron);
- To reduce the risk factors associated with modern diet and life (e.g. excessive cholesterol in the blood, compromised natural flora in the digestive tract);
- To provide the body with the sort of intake levels of foodstuffs needed to optimise our health and live longer better quality lives..
According to an iReach survey commissioned by the trade association, IHTA, in 2018, 71% of Irish people buy vitamin, mineral and other food supplements all year round, with 73% of those regular consumers doing so to ‘’maintain and improve ongoing adult health.’’
The health products industry has launched a campaign to appeal to the Revenue Commissioners and the Minister for Finance Paschal Donohoe to defer the application of 23% VAT on Food Supplements on the 1st of March 2019, so as to allow the Government time to take the advice and legislate. However, the industry alone is unlikely to be heeded. We are therefore also calling on consumers to make their opinions heard on this matter by signing the petition and contacting their TDs and ask their support for this important consumer health initiative.