Small businesses in towns throughout the country are preparing for the potential disaster of a sudden exit of the United Kingdom from the European Union. It is time for the Government to support small businesses to reinforce the viability of towns for shopping and services. In that context, it seems incredible that the Minister for Finance is sitting on his hands while a Revenue Commissioners' decision threatens the jobs and livelihoods of those involved in the health food store industry. Ireland has a range of value added tax, VAT, rates which include the zero rate applied to food. Historically, Revenue has applied the zero rate of VAT to food supplements, except those associated with sport, slimming and certain cosmetics. However, it has recently announced a new interpretation of the VAT rules applied to food supplements and that it intends to apply the 23% VAT rate to food supplements from 1 March. This will happen just four weeks before Brexit for an industry that is already very exposed to the UK market for imports and its supply chain. How does this represent helping business to prepare for Brexit? There are 3,600 jobs at stake in the industry.

The Minister for Finance has claimed that Revenue only ever allowed basic vitamins, minerals and fish oil products to be subject to the zero VAT rate, but his claim has been contradicted by the previous Minister for Finance, Deputy Noonan, who told the Dáil in June 2014: "A range of food supplements and vitamins that encourage the maintenance of health, through the sustenance derived from a normal, healthy diet, benefit from the zero rate." He then referred to Revenue eBrief 70/2011 which makes it clear that food supplements associated with sustenance are zero rated for VAT purposes but not those associated with increasing muscle mass or weight reduction. The Minister, Deputy Donohoe, has advanced a subtle but important change by referring to basic vitamins, minerals and fish oils. There is a fundamental question of policy. The Minister has insisted that he cannot interfere with an independent decision of Revenue, but that is not true. He is the policy maker. The job of Revenue under law is to implement, not to make, policy. It is certainly not to change it. The industry is asking the Government or the Minister to instruct Revenue to halt this interpretation of the new VAT change until a full review has been completed. That is a very reasonable request to make. There will be a budget in October and that is the time when we debate tax changes, understand their implications and have democratic oversight of them. Will the Government undertake to halt the impending change at a most vulnerable time for the industry until the Oireachtas has had a chance to review the matter?

The Deputy is aware that VAT is quite a complicated tax. It derives not just from the EU VAT directive but also from national legislation. There are different VAT rates for different foods, for example, fresh foods which are, of course, the healthiest to eat. There is also a zero VAT rate for oral medicines, but VAT is applied to injectable medicines because there is value added. VAT is also applied to processed foods. It is a Revenue interpretation in deciding the appropriate rate to be applied in different circumstances. It is not a political decision, or a decision of the Government or the Houses of the Oireachtas. It was not part of the Finance Act 2018 or the budget. It is a Revenue decision and it is for Revenue to interpret the rules and laws appropriately. The Minister for Finance has made contact with Revenue to see what can be done, but it would not be appropriate for him to direct the Revenue Commissioners on the rate they should apply to different products.

Does the Taoiseach accept that this is a policy decision to be determined not by an interpreter of the law but by the makers of it - this House and the Government? We determine the VAT rate to be applied, in accordance with EU rules. This is a change of policy that remained unaltered since 1972 and there is great uncertainty, even in this interpretation. For example, according to the Minister, why are fish oils determined to be basic but not other oils? Fish oils are a source of Omega 3, a basic nutrient, but flax and other oils which are also a source of Omega 3 are not to be treated in the same way. They are the oils preferred by vegetarians. This is causing confusion and, in the teeth of Brexit - at least ten separate businesses have contacted me directly to state they will not survive this change - can we simply not postpone it until there is a proper review and we can make a determination that will be subject to democratic accountability in this House?

Given his experience in government, the Deputy will be well aware that very often there are arguments about which VAT rate should be applied to which product or service. The Deputy will recall the debate some years ago on whether a cake was a cake or a biscuit a biscuit, based on the different rates applied. There are often debates about these matters. There has not been a change in the law in this regard. It is an interpretation to be made by the Revenue Commissioners. The Minister is examining the matter and we will see what we can do, but I do not think it would be appropriate for the Minister to direct Revenue to do anything on a tax matter such as this.