ISME, the Irish SME Association is today calling on Minister Pascal Donohoe to maintain the 0% VAT rating on food supplements. This follows the announcement by the Revenue Commissioners that a 23% VAT rate will be applied to all food supplements (including vitamins, minerals, fish oils, and probiotics) from the 1st of March 2019. Many of these products are consumed under medical advice or supervision. The Association notes that imposing such a rate on health food stores contradicts the Healthy Ireland initiative and would have a detrimental effect on many SMEs.
Commenting on the proposed 23% rate, ISME CEO Neil McDonnell noted:
“As there has never been VAT on these products, the impact on business will be catastrophic. Retail prices will unnecessarily rise, and small businesses will struggle to absorb or pass on the costs. The Minister needs to defer the decision until an impact study (which he called for in November) is completed or to legislate for a 0% rate of VAT.
Speaking today, one month before the proposed changes, ISME Member Garrett McCabe of Health Matters stated:
“Applying the 23% VAT rate will have a huge impact on the affordability of products that have significant health benefits. Furthermore, there could be job losses and closures for some stores in turn leading to a loss of revenue for the Government. It will also drive people online to purchase products from outside the State, again leading to a loss of revenue to the exchequer.
Between our stores, we employ 30 people and contribute €60,000 per year to local councils in rates. Health Matters is one of the last independently Irish owned stores on Grafton Street so it would be a disgrace for measures put in by our own Government to force a store to close.”