Industry has hit back at the Revenue office of the Irish Government for lack of understanding and total disregard after it was announced that the country would be subject to 23 per cent VAT applied to all health supplements.
Revenue, the Government department that handles tax and customs, published a new guidance document at the end of December, which explained that while the standard rate of VAT applies to food supplements, a Revenue concession allowed the zero rate to be applied to certain types of vitamins, minerals and fish oils. However, the document said that this concession no longer applies from March 1, 2019 and it will now be subject to the standard 23 per cent.
Following the announcement, a furious Health Stores Ireland, which represents health food stores across the country, hit back at the decision, with the organisation’s Administrator, Alan McGrath, telling Health Food Business: “The actions of Revenue are completely reckless towards the promotion of healthy lifestyle. We had received a written promise from the Minister for Finance, Paschal Donoghue, that he was referring the matter to a special tax strategy group for consideration and a report was expected later in the year. Now Revenue has come in and completely undermined our Finance Minister with a unilateral action that will have a devastating impact on health food customers and retailers.”
Continuing, Matt Ronan, Health Stores Ireland’s Stop this VAT campaign spokesperson, added: “There is a total disregard and a lack of understanding for the health food sector. This year, we have one of our members getting ready to celebrate 40 years in business. The sector has grown and offers quality employment and life changing opportunities to thousands of people, from store owners to seasonal workers and young graduates. This action will threaten the viability of many businesses.”
And Martha Brennan, Health Stores Ireland Chairperson, said she hoped the action would have a galvanising effect on the retail trade.
“If ever there was a need for independent retailers to be part of a vibrant trade association, it’s now. Trying to trade through choppy waters ahead will be difficult enough as part of a group, but trying to navigate this without a support network will be doubly difficult. Health Stores Ireland is here to help retailers understand the implications and facilitate the broader campaign at retail level,” she commented.
The guidance also sets out the VAT treatment of sports nutrition supplements, slimming aids, liniments, ointments and rubs made from food, folic acid and other vitamins and minerals classified as medicines, and foods for specific groups. For example, 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. Oral human medicines are liable to the zero rate, as are infant and follow-on formulae and infant foods.
