VAT rate review needed on unhealthy foods

Local Fine Gael TD and Junior Minister in the Department of Agriculture, Food and the Marine, Tom Hayes, has called on the Department of Finance to consider reviewing the VAT rate on certain unhealthy foods.

Local Fine Gael TD and Junior Minister in the Department of Agriculture, Food and the Marine, Tom Hayes, has called on the Department of Finance to consider reviewing the VAT rate on certain unhealthy foods.

Minister Hayes has highlighted an anomaly which means bottled water and fruit juice is taxed at the higher rate, while no VAT is levied on products like cooking fat and potato waffles.

“This week was Healthy Eating Week in Leinster House, so it’s a good opportunity to look at the policies we are implementing as a Government when it comes to encouraging healthy eating. At least 300,000 children and 50% of adults are now classified as overweight or obese in Ireland; which represents an alarming increase of 6% in the last decade alone.

“It’s estimated that obesity is currently costing the State more than €1 billion a year. Being severely overweight also increases your chances of developing a long list of serious diseases. In other words, this is a problem that isn’t going away, and cannot be ignored.

“These statistics make it all the more incomprehensible that healthy produce such as fruit juice and bottled water are subject to 23% VAT, whilst things like cooking fat and potato waffles are subject to zero tax. Surely, we should be striving to ensure that healthy foods are as affordable as possible, whilst discouraging the consumption of less healthy foods.
“By increasing the VAT on food high in salt, sugar and trans-fats by a very modest amount, significant revenue could be generated for the State each year; revenue that could be channelled back into health services and healthy eating initiatives.

“This would go some way in encouraging more people to engage in a healthier lifestyle, helping prevent ill health down the line and significantly reduce the cost to the Exchequer of obesity-related diseases. In turn, by protecting the 0% VAT on healthy foods and by reducing the overall cost of a healthy shopping basket, we would help families to stick to a healthy diet within their budgets.”