Brendan Howlin (Wexford, Labour) | Oireachtas source

Small businesses in towns throughout the country are preparing for the potential disaster of a sudden exit of the United Kingdom from the European Union. It is time for the Government to support small businesses to reinforce the viability of towns for shopping and services. In that context, it seems incredible that the Minister for Finance is sitting on his hands while a Revenue Commissioners' decision threatens the jobs and livelihoods of those involved in the health food store industry. Ireland has a range of value added tax, VAT, rates which include the zero rate applied to food. Historically, Revenue has applied the zero rate of VAT to food supplements, except those associated with sport, slimming and certain cosmetics. However, it has recently announced a new interpretation of the VAT rules applied to food supplements and that it intends to apply the 23% VAT rate to food supplements from 1 March. This will happen just four weeks before Brexit for an industry that is already very exposed to the UK market for imports and its supply chain. How does this represent helping business to prepare for Brexit? There are 3,600 jobs at stake in the industry.

The Minister for Finance has claimed that Revenue only ever allowed basic vitamins, minerals and fish oil products to be subject to the zero VAT rate, but his claim has been contradicted by the previous Minister for Finance, Deputy Noonan, who told the Dáil in June 2014: "A range of food supplements and vitamins that encourage the maintenance of health, through the sustenance derived from a normal, healthy diet, benefit from the zero rate." He then referred to Revenue eBrief 70/2011 which makes it clear that food supplements associated with sustenance are zero rated for VAT purposes but not those associated with increasing muscle mass or weight reduction. The Minister, Deputy Donohoe, has advanced a subtle but important change by referring to basic vitamins, minerals and fish oils. There is a fundamental question of policy. The Minister has insisted that he cannot interfere with an independent decision of Revenue, but that is not true. He is the policy maker. The job of Revenue under law is to implement, not to make, policy. It is certainly not to change it. The industry is asking the Government or the Minister to instruct Revenue to halt this interpretation of the new VAT change until a full review has been completed. That is a very reasonable request to make. There will be a budget in October and that is the time when we debate tax changes, understand their implications and have democratic oversight of them. Will the Government undertake to halt the impending change at a most vulnerable time for the industry until the Oireachtas has had a chance to review the matter?

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