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Last ditch attempt to stop 23% VAT being added to vitamins and supplements

Food supplements have been treated as foods for VAT purposes and had availed of the concessionary 0% rate applicable to food.

Image: Shutterstock/Saowanee K

OVER 60,000 PEOPLE have signed a petition urging the government not to place 23% VAT on vitamin and mineral supplements on 1 March as planned, but the opposition comes as some medics question how useful such products are. 

Food supplements have until now been treated as foods for VAT purposes, availing of the concessionary 0% rate applicable to foods in Ireland for more than 40 years. However, it emerged late last year that the 23% rate would be applied to these products come 1 March 2019.

The idea to add the tax has been criticised by a number of opposition parties – including Sinn Féin and Labour. 

However, there has been a mixed reaction from health professionals particularly as there will be a list of products which will be exempted from change and continue to enjoy a 0% VAT rate.

The exemptions include folic acid and other vitamins and minerals licenced by the Health Products Regulatory Authority.

Dr Mary Rose Sweeney, associate professor in the School of Nursing and Human Sciences at Dublin City University, has conducted significant research on supplements and vitamins. She has also written extensively about folic acid and the level of intake in the Republic of Ireland. 

She explains that most people in Ireland don’t need to take supplements but notes there are a number of exceptions – the most obvious being that folic acid recommended for all women who could become pregnant.

“Folic acid supplements are not expensive so a 23% vat increase is unlikely to be a big deterrent for the majority of those who should take them and a number of folic acid products regulated by the HPRA are exempt from the VAT so that means women can still buy these products that are licensed, without the added VAT,” she explains. 

“Other exceptions include iron, which is often recommended by doctors during pregnancy, or for those on vegetarian and vegan diets; vitamin B12 required by those on a vegan diet; and vitamin D drops which are recommended for infants in the first year of life.

“Outside of these exceptions above – which are recommended – supplements should only be taken on the advice of a health care professional after an assessment and diagnosis of deficiency and intakes should be at recommended intakes only – not the mega doses available in so called ‘health stores’, pharmacies or supermarkets.”

However, the Irish Health Trade Association (IHTA) claims the proposed VAT rate puts nearly 2,000 jobs in jeopardy. 

IHTA spokesman Alan Martin said the decision needs to be reversed.

We urgently need the Minister to intervene and reverse a recent decision by the Revenue Commissioners to introduce a 23% VAT rate on food supplements which will threaten 250 local businesses with closure and put 1,800 jobs at risk. We are in a very dangerous position in our industry with imminent job losses and the people reliant on supplements having to face the harsh reality of a 23% increase.

‘’Last year the government introduced a so-called ‘fat tax’, which saw a levy introduced on sugary drinks. For the past 40 years, food supplements have been sold at the 0% rate, including products such as Vitamin C, Omega 3, Probiotics, Lutein and Glucosamine. The 23% VAT rate needs to be urgently revisited by the Minister for Finance as it will have a major effect on the old, the elderly and the sick.”

Health Stores Ireland, the association for health food stores and the Irish Pharmacy Union have also come out against the VAT increase.

Retail Excellence Ireland is also calling on the government to review the proposed VAT hike. It said such a move will have a serious impact on consumers who rely on supplements in order to maintain their health.

Junior finance minister Michael D’Arcy told the Seanad earlier this month that there had been confusion over which products would face the new VAT rate. 

He explained: “It should be noted that human oral medicines, including certain folic acid and other vitamin and mineral products licensed by the Health Products Regulatory Authority, will continue to apply at the zero rate of VAT. It is possible to retain these products at the zero rate because they qualify as oral medicines, which are charged to VAT at the zero rate in Ireland under an historical derogation to EU VAT law. Infant foods will also continue to be zero rated.”

The latest advisory from Revenue also confirms this point. It reads: “Human oral medicines that are licenced / authorised by the HPRA are zero rated. These products are listed on the HPRA website and have Product Authorisation (‘PA’) numbers on their label. Certain folic acid and other vitamin and mineral products for oral human consumption which are licenced / authorised by the HPRA and have PA numbers on their label are zero rated.”

The IHTA is holding a last-ditch meeting in Dublin today to convince the government to reverse the decision to implement the tax. 

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