Dáil Éireann Debate, Thursday - 25 October 2012
56. Deputy Robert Dowds asked the Minister for Finance if his attention has been drawn to the fact that although many unhealthy foods and beverages are taxed at the standard rate, anomalies exist whereby products high in fat, sugar and salt are taxed at a reduced, or zero, rate;his plans to address these anomalies in the Budget 2013; and if he will make a statement on the matter. [46975/12]
Amharc ar fhreagraVAT is a tax on the value added to products and services and is governed by the EU VAT Directive. EU VAT rules provide that a standard VAT rate of between 15% and 25% applies to the supply of all goods and services with certain derogations. Annex III of the VAT Directive provides a list of goods and services to which Member States may apply a reduced rate of between 5% and 15% (with Member States applying no more than 2 reduced rates). In addition, various derogrations apply whereby Member States may retain historic VAT rates on specific goods and services where those VAT rates applied on 1 January 1991. In Ireland most food applies at the zero rate of VAT, this includes bread, butter, tea, sugar, meat, milk, and vegetables. This is a derogation from EU VAT law, as described above, as food applied at the zero rate in 1991. Bakery products, for example cakes, crackers, certain wafers, croissants and biscuits operate at the 13.5% reduced VAT rate. This is also an historical VAT treatment. In this regard, all other food and drink apply at the standard VAT rate, such as alcohol, soft drinks, bottled waters and health drinks soft drinks, sweets and chocolate and similar confectionery, wafers and biscuits covered with chocolate or other similar product, ice-cream and ice-lollypops, potato and similar crisps, popcorn, salted and roasted peanuts.
