23% VAT hike on food supplements will endanger jobs – Howlin

Labour Party Leader, Brendan Howlin TD, has again raised the issue of the sudden, and unfair, decision by the Revenue Commissioners to change from zero to 23% VAT on food supplements. The recent decision was not detailed in the last Budget and will have a detrimental effect on small businesses in towns and villages all around the country. 

Speaking in the Dáil, Deputy Howlin said:

“Small businesses in towns across the country are preparing for the potential disaster of a sudden exit of the UK from the European Union. Now is the time for Government to support small businesses, and to reinforce the viability of towns for shopping and services. 

“It seems incredible that the Minister for Finance is sitting on his hands while a Revenue decision threatens the jobs and livelihoods of those involved in health food stores. Ireland has a range of VAT rates, including the zero rate that applies to everything from food and – as Fine Gael should know – to children’s clothing and footwear.

“Historically, Revenue has applied the zero rate of VAT to all sorts of food supplement that people take since the 1970s, except those associated with sports or slimming. Revenue has recently announced a new interpretation of the VAT rules, which amounts to a change of policy without Government approval.

“This change will happen just four weeks before Brexit, to an industry that is already very exposed to the UK market for imports and supply chains from further afield.

“How does this represent Fine Gael helping business prepare for Brexit? There are 3,600 jobs at stake in this industry.

“Minister Paschal Donohoe has claimed that ‘Revenue has only ever allowed basic vitamins, minerals, and fish oils to apply at the zero rate.’  But his claim is contradicted by the previous Minister for Finance, Michael Noonan.

“Minister Donohoe has insisted that he cannot interfere with Revenue’s operations. This is not true. The Minister is the policy maker. Revenue’s job is to implement policy, not to make policy or to change policy.”