Maria Byrne (Fine Gael)
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I thank the Minister of State for coming to the House to discuss this all-important topic. I am asking the Government to reduce VAT on sunscreen and sun protection factor, SPF, products to 0%. The Irish Cancer Society tells us that over 13,000 people are diagnosed with skin cancer every year. While we encourage people to wear sunscreen and to use SPF products, under law, these are seen as cosmetic products. Under EU law, they are categorised as cosmetic but they are proven to prevent skin cancer. The latter means that these products have been placed in the wrong category. When I raised this matter in August of 2024 and again in June of last year, the then Minister for Finance, former Deputy Michael McGrath, went to the European Commission to see if the categorisation could be changed to pharmaceutical. A lot has happened in this space. In 2022, a 0% VAT rate was applied to hormone replacement therapy, HRT, patches and creams and to sanitary products. While we have come a long way, one of the most effective creams in protecting people from skin cancer is still in a different category. I really cannot figure out why such products are classed as cosmetic.

In some ways, the EU is being contradictory, with certain products in the 0% VAT category and others, like sunscreen, in the 23% category. Some stores have reduced the price of sunscreen to encourage people to use it. For low-income families especially, it is very costly. The price also seems to go up in the summer months. Dermatologists recommend that we should apply sunscreen all year round. We should be pushing to have sunscreen declared a pharmaceutical product and made subject to a 0% rate of VAT. I look forward to the Minister of State's response.

Jerry Buttimer (Cork South-Central, Fine Gael)
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I thank Senator Byrne for raising this issue. The Minister of State at the Department of Finance, Deputy Troy, has been delayed and apologises for not being here to take it. Senator Byrne has significant interest in this matter and has raised it repeatedly in the House. I thank her for the work she is doing in that regard. This is an important issue, and the Senator is right to highlight the anomaly in terms of pricing. Also important are the year-round piece and the piece around low-income families. The points the Senator makes are worth listening to.

I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the VAT directive provides that all goods and services are liable to VAT at the standard rate unless they are exempt from VAT or fall within Annex Ill of that directive, in respect of which member states may apply reduced rates of VAT. The reduced rates of VAT in Ireland are 9% and 13.5%, respectively. Unfortunately, under EU law, there is no scope for a reduction in the rate of VAT on sunscreen products as they are not one of the products listed in Annex III. As a result, the supply of sunscreen products is liable to the standard rate of VAT of 23%. This goes to the heart of the Senator's argument in terms of the categorisation of sunscreen products.

As the Senator knows, there has been ongoing engagement on this issue with the European Commission since 2023. Clarity was sought on whether the text of Annex III of the VAT directive which refers to pharmaceutical products could be understood to include sun protection products. Unfortunately, the European Commission confirmed that it was not possible for sunscreen products to be considered pharmaceutical products because they are deemed to be classed as a product in the category of cosmetic or toilet preparations. Senator Byrne is right, and I concur completely, that these are not cosmetic products or toiletries. They are pharmaceutical products that prevent skin cancer. She is 100% right about that, and I am not just saying that as her colleague and friend. She is right that sunscreen prevents skin cancer.

The Commission advised that a reduced rate cannot be applied to sun protection products such as sunscreen. In the broader context of Annex III of the VAT directive, I have been advised that an agreement was reached to amend and expand its scope in April of 2022. Changes to the VAT directive, which require unanimity among member states, were negotiated over a four-year period. I understand that changes made to Annex III of the VAT directive did allow the Government to apply a zero rate of VAT to non-oral medicines such as HRT patches and creams and to nicotine replacement therapy patches. In addition, the Government was also able to move the VAT rate for automatic external defibrillators to zero, which the Senator will be aware was a long-standing request of many in the Oireachtas. Also worthy of mention is the fact that Ireland has always maintained a zero rate of VAT on oral medicines. We ensured that these zero rates were maintained in the 2022 agreement. While these were successful outcomes, I regret it was not possible to secure changes in respect of sunscreen. It is my understanding that no further changes to Annex III of the VAT directive are expected in the medium term, which is unfortunate.

The Senator's points were well made. I will bring them back to the Department. It is important that Senator Byrne continue to advocate for this change, not only through the Oireachtas but also through the Inter-Parliamentary Union. In that context, I urge her to engage further with the Department and with European colleagues. This is an important issue, and she is right about it. I thank her for raising it and am sorry that the reply I have given is not as positive as she deserves.

Maria Byrne (Fine Gael)
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I appreciate the response and the Minister of State's personal interest in this matter. It is something that we should all be interested in because, ultimately, skin cancer is one of the most common cancers in Ireland. We all know somebody who either has it or has recovered from it. If we can prevent it, we should do so. I thank the Minister of State for his suggestion that I should continue to campaign on this and should approach colleagues in the EU. I certainly will do that. Will he inform the Tánaiste and Minister for Finance that I will be coming back to him on this?

Jerry Buttimer (Cork South-Central, Fine Gael)
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Again, I thank Senator Byrne for raising this very important issue. I appreciate the importance of it for so many people. She is right that skin cancer is prevalent, and we are seeing that much more now with climate change. She is right that sunscreen is an important part of safeguarding our skin against sun damage and skin cancer. Her advocacy this morning stresses not just the value of wearing sunscreen but also that we need to be a bit more hands-on and take a more common-sense approach in the context of VAT. Sunscreen is not a cosmetic or a toiletry. It is a pharmaceutical product for the prevention of skin cancer. I regret that the VAT applied is at a rate of 23%. That is a matter for the European Commission. It would do no harm to engage with EU Commissioner, former Deputy Michael McGrath, and other Commissioners on the matter.

Senator Byrne's work on this issue is important, and she should not be put off by this morning's reply. More and more people are being diagnosed with skin cancer, and it is becoming common across Europe. While being diagnosed with melanoma may not be as catastrophic as it once was, it is still not a nice diagnosis to get. We need to continue to highlight both the ongoing risk of and ways to prevent skin cancer. This is one way of doing it. I again thank the Senator for raising this matter. I look forward to working with her further on it.