The Irish Association of Health Stores (IAHS) has hit back at plans by the Government to introduce VAT on health supplements and herbal remedies.
The organisation, which represents health stores in Ireland, has responded to proposals from the Department of Finance and Irish Revenue, which the IAHS says is threatening to add VAT at 23 per cent to such products.
In its pre-budget submission, the IAHS has reminded Minister for Finance, Michael Noonan, that its trade sector saves the National Exchequer thousands of euro annually and has called for all health supplements to remain at zero per cent.
Within the submission, the IAHS pointed out that in 2012, the rules were altered to allow 23 per cent VAT to be applied to sports supplements, diet products, and detox items.
“This seemed a reasonable move given that sport and weight loss products were discretionary purchases for the most part and could be seen as being ‘non-essential items’,” the organisation said. “However, the definitions used for this rule change appear to have led us to a situation where in fact any health supplement deemed to have a health ‘enhancing’ effect can be pulled into the 23 per cent category.
“This also means that each product description becomes an issue for manufacturers as they struggle to avoid the crippling effect of 23 per cent VAT on their sales. We would argue that as a sector we need clarity on this vital area, and that it is now time to have a look at a broader approach to health and to recognise and formalise what it is that we are aiming for with Government policies and practices.”
IAHS Chair, Kevin Connolly, commented: “We believe that an industry sector which actively promotes health and wellbeing should be encouraged to flourish, and certainly not be taxed out of existence.”
As part of its opposition to the addition of 23 per cent to the current cost of multiple health food supplements, the IAHS says:
- Taxing health products would be counter-productive, particularly in an era when there is so much focus on healthy living initiatives, obesity and disease prevention. There is a marked contradiction between promoting health initiatives which encourage people to take charge of their own health on the one hand, and taxing one of the main areas which can support good health on the other.
- Health products are heavily used by the elderly who, with their limited budget, would be unduly affected by a price increase of 23 per cent on these products. It would be exceptionally difficult to justify taxing a product like glucosamine, for example, which many pensioners use to support their aching joints.
- The submission further reminds the Minister that increasing VAT on health products would ultimately affect the number of those employed in this industry sector, which currently totals just under 2,000.
IAHS member retailers have met with Fine Gael and Labour TDs, who have heard first-hand how the IAHS believes the proposal is being negatively viewed by the public at local level.
Commenting on words from Minister for Health, Leo Varadkar, who was quoted as saying it was shifting the focus of healthcare from hospitals to the community, and from treating illness to maintaining good health, Connolly added: “We welcome this commitment from Minister Varadkar and see it as a declaration of intent. If we take it then that ‘maintaining good health’ is now a clear ambition for the Government, this intention should not be contradicted by the taxation regime.”
At this stage, several thousand petitions and letters have been delivered to local constituency offices and to the Minister’s desk.