Written answers

Tuesday, 20 November 2012

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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To ask the Minister for Finance rather than increasing the tax on fizzy drinks, if it would be more prudent to remove or reduce the VAT from the sugar free drinks to encourage persons to switch to a healthier option; and if he will make a statement on the matter. [51124/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The VAT rating of goods and services is constrained by the requirements of EU VAT law with which Irish VAT law must comply. For tax neutrality purposes the same VAT rate must apply to beverages such as soft drinks, fruit juices, smoothies and bottled water, regardless of their sugar content. While it is possible to apply a reduced VAT rate to soft drinks, this would have to apply to all beverages, including soft drinks with sugar and would be costly to the Exchequer. However, it is not possible to apply a reduced rate to sugar free soft drinks, while applying the standard rate to soft drinks with sugar. The application of the same VAT rate to these beverages is consistent across the EU. Prior to 1992 bottled waters and fruit juices had applied at the zero rate, but were made subject to the standard rate from 1 November 1992 in order to correct the competitive anomaly, as the similar competing products such as soft drinks were standard rated.

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