Catherine Murphy (Kildare North, Social Democrats)
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171. To ask the Minister for Finance the rationale for applying the 23% VAT rate to food supplements; if health supplements fall under this rate; his plans to task the tax strategy group with reviewing the decision in 2019 in the context of the budget; and if he will make a statement on the matter. [4142/19]

Peter Burke (Longford-Westmeath, Fine Gael)
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176. To ask the Minister for Finance if the impact in the change of policy for tax treatment of health food products which now incur a 23% VAT will be reviewed; if he will consider requesting the Revenue Commissioners to review the decision; and if he will make a statement on the matter. [4265/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 163, 171 and 176 together.

The standard rate of VAT applies to food supplements. However, a Revenue Commissioners concession allowed the zero rate to be applied to certain types of vitamins, minerals and fish oils. Revenue has since decided to remove this concession with effect from 1 March 2019 so that all food supplements will be charged at the standard VAT rate.

It should be noted, however, that human oral medicines, including certain folic acid and other vitamin and mineral products, licensed by the Health Products Regulatory Association will continue to apply at the zero rate of VAT. Infant foods will also continue to be zero rated.

The operation of the concession became extremely problematic as a result of efforts by certain businesses in the industry to extend the concession beyond the scope permitted. Consistent challenges to Revenue guidance and decisions on the VAT rating of products gave rise to serious concerns about compliance within the industry and unfair competition between compliant and non-compliant businesses.

However, independent of Revenue’s decisions on interpretation, I agreed during the recent Finance Bill to put in place a process that will conclude in the 2019 Tax Strategy Group Paper to examine some of the policy choices around the VAT treatment of food supplements.