Zero to 23% VAT hike could close local health stores
Health food shops in Wexford blacked out their windows last Friday in protest at a move by the Revenue Commissioners to slap a 23% VAT rate on food supplements such as vitamins, probiotics and fish oils Supplements currently attract a zero VAT charge as they are categorised as food but that is set to change from March 1, resulting in higher costs for customers.
Health store owners have warned that jobs will be lost and premises will close unless the Government intervenes to stop the imposition of VAT on many of their products.
Matt Ronan, the proprietor of Evolv in Enniscorthy is the campaign’s national spokesperson, representing about 200 small health food stores dotted around Ireland.
‘Health shops are going to be massively affected by this hasty measure and will be facing, in some cases, closures and staff lay-offs if it is implemented’, he said.
Wexford TD and Labour leader Brendan Howlin has raised the issue in the Dáil.
Management and staff of Evolv, Only Natural, the Wexford Natural Health Store and Rainbow Wholefoods came together for a protest in the Bullring, Wexford on Friday morning last, as part of a nationwide action, calling on the Government not to tax health.
‘Retailers and wholesalers cannot afford to absorb the 23% and will have to pass it on. This will hit the pockets of anyone who buys supplements’, said Patrick Meehan of the Natural Health Store on the Main Street.
‘A lot of customers are on low or middle income and will not be able to afford them anymore’.
‘A bottle of Cod Liver Oil selling for €10 now will rise to €12.30 with the VAT increase and a bottle selling at €20 will increase to €24.60.’
‘We need to highlight to consumers the effect this will have on their pockets as well as their health and ask them to contact their local TD’s or sign a petition in health stores or online’’, said Patrick.
‘All health stores and other retailers selling supplements need to stick together on this. A VAT rate of 23% will have a huge impact on sales and the potential for thousands of job losses and possible store closures’.
‘GP’s surgeries are already full and a lot of counties are looking at a shortage of GP’s in the coming years. Taking good quality health supplements can help keep people healthy and
WE WILL HAVE THE RIDICULOUS SITUATION WHERE YOU CAN BUY A BURGER AND CHIPS FROM A TAKEAWAY AT A 13.5% VAT RATE BUT IF YOU DECIDE TO CONSUME SUPPLEMENTS TO HELP WITH IMMUNITY AND CARDIOVASCULAR HEALTH, YOU WILL BE TAXED AT THE FULL 23%
away from their GP for minor illnesses’, said Mr. meehan, calling on the Government to intervene.
Matt Ronan said health stores are already encountering a wave of customer anger over the prospect of forced price increases.
The 0% rate on food supplements has been in place since 1972.‘Ireland is somewhat unique in the EU in that along with Britain we have a zero rate of VAT on normal foods. The we have the likes of biscuits and crackers at 13.5% with chocolate biscuits, sweets and fizzy drinks coming in at 23%’, he explained.
‘Despite a 40-year tradition of not taxing food of health products, the Revenue Commissioners has been pushing since 2012 to impose taxation on products such as probiotics which help the digestion and immunity, glucosamine sulphate which is used to keep achy joints moving and the likes of turmeric which is helpful in reducing inflammation and pain for people who have sore muscles or joints’.
Products that help prevent macular degeneration, a cause of blindness, and supplements that help with the menopause are also due attract the 23% VAT rate. However, food products such as rice and nuts will not be taxed.
‘As it stands, from March 1, we will have the ridiculous situation where you can buy a burger and chips from a takeaway at a 13.5% VAT rate but if you decide to consume Vitamin C, Vitamin D or Omega-3 fish oils to help with immunity and cardiovascular health, you will be taxed at the full 23%’, said Matt.
The campaign spokesman said a recent survey found that 71% of Irish people use food supplements quite regularly. ‘So, it is by no means a minority issue and it is essential that the Minister recognises his responsibilities and brings sanity to a situation which is beginning to teeter on the ridiculous’, he said.
Health Stores Ireland have submitted a position paper to the Minister for Finance, outlining ‘this outrageous situation’.’
‘It is vital that a discussion takes place in order to avoid chaos for consumers who will be massively diminished in their ability to protect and sometimes regain their health, using simple natural products largely based on food’, said Mr. Ronan.