VAT increase on Supplements Deferred
The VAT rate on food supplements was due to increase from 0% to 23% on March 1st. Due to an outcry from the public, health professionals, politicians and trade associations, the Minister for Finance Paschal Donoghue announced that that he will allow further time for the Government to review this VAT increase, so the VAT increase has been deferred by the Government until 1 November 2019. Since 1973, supplements have been at a Zero-rated VAT rate in Ireland, so this is all about to change. This means that that Food Supplements which include the likes of vitamins and minerals, fish oils, slimming products, sports nutrition supplements etc will increase in price by 23% from November 1st next. If you buy a supplement that currently costs you €20, it will increase in price to nearly €25.
Products that will be exempt from this Price increase
Products classed as more essential, so are licensed by the Health Products Regulatory Agency (HPRA) will not be affected by this VAT price increase. This includes Infant Feed formula, folic acid, iron, Vitamin B12 Injection and Vitamin D as well as specialised feed that are prescribed by the doctors and dieticians such as for those on specialised diets including those who are tube feeding due to serious illness or patients living with PKU also known as Phenylketonuria which is a condition some people have from birth caused by a defect in metabolism that results in decreased metabolism of the amino acid phenylalanine so the person needs a specialised protein free diet otherwise it would lead to serious health problems or death.
Why the VAT increase
A Government statement last December explained that "Following growing concerns of industry representative bodies about the difficulties in distinguishing between food supplement products which could be zero-rated and those which should be standard-rated, Revenue undertook a comprehensive review on the VAT treatment of food supplements”.
They continued "Following the review Revenue issued new guidance in December 2018, applicable from 1 March 2019” While this explanation is ambiguous, further research on the Revenue’s website gives lots of information on what products will and will not be affected by this VAT increase, but no information on the reason for the increase. The Revenue’s document on what products will or will not be affected can be found on their website www.revenue.ie. If you google “revenue food supplements” you will find the Revenue’s detailed document what will and won’t be affected.
Arguments for and against this VAT increase.
Most people see it simply as an additional way of taxing people and for the government to get more revenue.
Some health professionals argue that the Government should not be offering Zero VAT on products that have no clinical data on efficacy and there is some validity to this point. If you have a balanced and healthy diet, there should be no need for extra supplements in most cases. Also, there is some evidence that some people use taking supplements as an excuse not to eat as much fruit and vegetables or follow healthy diet advice as they are of the false belief that supplements substitutes the need to for the likes of fruit and veg.
Obviously as I mention above, there are certain medical conditions where people need a supplement for medical reasons and thankfully some of these supplements will be exempt from this VAT price increase. This exemption from VAT will include Vitamin D (deficiency very common in Ireland due to lack of sun), Iron (treats anaemia which is common in women), Vitamin B12 Injection (often prescribed by doctors for people suffering from Pernicious Anaemia which is often hereditary vitamin deficiency and also more common in people who follow a Vegan or Vegetarian diet) and Folic Acid (should be taken by pregnant women to prevent spina bifida in the unborn child). However; I do believe some supplements which I see people benefit greatly from such as Omega 3 fish oils and Probiotics are being unfairly targeted by this Tax increase. I have often discussed the benefits of the likes of fish oils and probiotics for certain conditions in my column but like all my advice on supplements, they are never a substitute for a balanced diet. An important supplement which many people must take for their bones to prevent fractures is Calcium. Many people with osteoporosis (also called brittle bone disease) which is one of the most common conditions in women over 60 and a major cause of morbidity and mortality are prescribed calcium to prevent and treat the condition. I can not find any information from Revenue or the government on whether calcium will be affected by this VAT increase; I hope it is not as it is very important vitamin for many and is prescribed to hundreds of thousands of Irish people.
In my opinion the Government know the cost of everything and the value of nothing; this is mainly an attempt to generate more revenue, but it may come back to bite the government in future years due to increased health costs as less people take certain supplements that could benefit them. There will also likely be job losses as many supplements are manufactured in Ireland as well a potential job-losses in Health Food Shops (who will see nearly 100% of their stock go up in price by 23% from November 1st) and pharmacies who offer food supplement advice and sales to their customers.
I will keep you posted in the coming months in the Westmeath Topic on the outcome of this Government review of their VAT increase on food supplements and related products.
For health advice and information call in to Whelehans Pharmacies, log on to www.whelehans.ie or dial 04493 34591 (Pearse St) or 04493 10266 (Clonmore).