Mr. Eoin O'Sullivan:

I thank the Cathaoirleach and committee members. On behalf of the signatories of my petition, I thank the committee for the opportunity today to address it. I am the owner and clinical director of Peace Inside, a counselling and psychotherapy centre in Galway. I am an accredited member of the Irish Association of Humanistic and Integrative Psychotherapy and registrant with the Irish Council for Psychotherapy, ICP.

The responsible, ethical and just decision has been taken by the Department of Finance to remove significant cost barriers to essential mental health services. As stated in the Dáil on 6 November 2018, it has been decided that counselling and psychotherapy services will be VAT exempt. It is also clearly published on Revenue's website that payments for treatments by a psychologist or psychotherapist are qualifying expenses for tax relief. There is no argument that these measures are not in the best interests of the public and, in fact, the decisions have already been taken to provide these reliefs.

As confirmed to the committee by the Department of Health, the Government has, unfortunately, chosen to link the enactment of these supports to an event that has no projected timeline for its completion. What this petition asks is simply that the measures, already approved, be validated immediately so that the public may benefit from them at a time when the public health system cannot meet the demand for services. There seems no justifiable obstruction, legal or otherwise, to implementing these reliefs. Although, to my knowledge, the Department of Finance chose not to reply to the committee's request for a response to information presented in this petition, its position has been clearly stated previously. Its refrain goes that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. While this is true, it avoids stating that provisions are made within EU law for individual member states to provide exemptions for VAT for certain activities in the public interest. Such activities include the provision of medical and paramedical professions as defined by the member state concerned.

In the determination by the Tax Appeals Commission previously submitted by me to the committee, precedent is set that psychotherapy and counselling services amount to medical care and can be recognised as professional services if provided by someone who has undergone specialist training or education for the provision of those services. There is no need for regulation of the professions for a VAT exemption to be in compliance with EU tax law. It is sufficient that those services can be recognised as medical or paramedical professions and provided by professionals if those persons have undergone specialist training for those services. In fact, despite protestations that the current position on the imposition of VAT is to ensure the State's compliance with EU tax law, this position is contrary to a core principle of fiscal neutrality. The directive states the common system of VAT should result in neutrality in competition, such that within the territory of each member state similar goods and services bear the same tax burden. In Ireland at present, psychology services are VAT exempt. Treatment services provided by psychologists, psychotherapists and counsellors are similar services. In order for Ireland's current VAT position to be in line with EU VAT law then all such services must be made VAT exempt.

As regards the eligibility of fees related to psychotherapy, psychological or counselling services for tax relief, there also seems to be no prohibitive barrier. EU member states have the authority to set their own income tax levels. They also have the autonomy to determine their own tax brackets and rules for income tax. This means that EU member states can establish their own income tax rates and modify them as they see fit, within the boundaries of their national legislation and any applicable EU directives. EU member states can also provide tax incentives, such as rebates, which may be granted for specific expenses. There seems little restriction to Irish legislation that would allow for psychology, counselling or psychotherapy expenses to be an eligible expense without the condition of registration to a psychology, counselling or psychotherapy board that will not open in the foreseeable future. We again return to the concept of medical or paramedical services provided by individuals specifically trained to provide such services as being sufficient to allow for the provision of these reliefs.

In relation to CORU and the opening of the registers for counsellors and psychotherapists, I note that CORU has entered a period of public consultation which is due to end in December 2023. Subsequent to this, CORU will reflect on the information received from the consultation process and make any amendments necessary to its proposals. There will then follow an undefined period of adaptation of training colleges and institutions before the opening of the registers is possible. We are still awaiting a timeframe for the opening of the registers. The decision has been taken by Government to provide tax relief for the provision of essential mental health services. That it has also decided to delay these reliefs indefinitely until the opening of relevant registration boards is unjustifiable and unnecessary, and is, in effect, causing harm to the mental health of a significant proportion of the population of the State.

I have submitted with this opening statement a letter of support from the ICP. I also want to mention the pre-budget submission of the Irish Association for Counselling and Psychotherapy, IACP, in which it calls for a VAT exemption for counselling and psychotherapy services and an extension of tax relief to include counselling and psychotherapy. I am aware that the CEO of the IACP, Lisa Molloy, has been a dedicated campaigner for these issues for a number of years. I thank committee members for their time. I am happy to take questions on this opening statement.