Finance Minister Paschal Donohoe is facing growing demands to reverse the imposition of VAT on supplements to help many elderly people who rely on such products.
Sally Smith – Owner of Open Sesame, has been in business for 31 years with two branches employing 6 Full Time and 4 Part Time staff. Even after 3 decades in business, Sally feels that this is one of the biggest challenges the health food industry has ever faced. “We have heard from several customers who say they are facing a massive increase in their monthly health food supplements bill thanks to the proposed 23% VAT rate from March 1st.”
The Irish Health Trade Association (IHTA), representing producers and distributers, said the introduction of VAT would have a major effect on the old and the sick.
Sally has rejected a statement by Mr Donohoe who said the Revenue Commissioners came up with the VAT increase through interpretation of the tax code and he had to accept their decision as his “hands were tied.”
“His hands are not tied. The minister is sitting on his hands,” she says .
Sally says a similar move to put VAT on herbal teas was reversed in 2014 by a brief new piece of legislation which kept the zero rate in place. She said the minister could easily take similar action this time, and needs to do so to save jobs.
Sally warned that there would be serious consequences for health stores throughout Ireland; “ Our staff have mortgages, young families and myriad other responsibilities. The move to place VAT on supplements poses a threat to all of our livelihoods”
“This VAT introduction will cause people to go online to buy supplements from abroad so it will be a recipe for exporting jobs out of the country,” she said.
“I guarantee it will stop people buying them over the counter.”
For example an elderly customer might rely on glucosamine sulphate tablets, curcumin and Omega 3 fish oils to keep their joints supple and to keep themselves mobile. If that currently cost 100 per month the proposed VAT will result in a €23 increase to the consumer .
Thankfully the media have picked up on the cause and a day of action is planned for Friday 8 Feb.
Sally points out
“the minister has failed to consider that the decision will ultimately put more pressure on health services which, as we all know, are already stretched. Someone normally buying supplements to help with simple ailments like coughs and colds will be more inclined to go to their GP for medication instead, especially those on the medical card. Our industry, like everyone, is facing possible import taxes from Brexit already, and this proposed VAT seems like it might just be the last straw. Health stores are particularly vulnerable because they are small, independent family run businesses on the main streets of small towns right across Ireland. To see these close would be hugely damaging to their local communities.”
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