Finance Minister Michael McGrath was urged to implement a zero VAT rating on Covid-19 antigen tests on a "care and management basis" after an oversight threatened to see their prices rise for consumers.
The minister was told that the 0% VAT rate applying to the tests had not been considered during last year's finance bill discussions due to an "oversight".
Mr McGrath was warned that while Ireland’s vaccination programme had been a success, there still remained "significant levels of this virus in general circulation".
A submission said: "This is reinforced by the public health guidelines which continue to advise caution, in particular recommending self-isolation if you have symptoms of Covid-19 and Covid testing for [certain] categories [of people]."
Officials said that antigen tests had been subject to a zero VAT rate up until 31 December of last year based on a derogation from the EU Commission during the pandemic.
They said the derogation had now expired but it was now possible to introduce changes that would ensure the 0% rate would apply permanently.
The submission added: "Due to an oversight this was not considered as part of the Finance Bill 2022 process."
Officials said it should now be introduced with immediate effect but that it would require legislation, which could take time.
However, the chairman of the Revenue Commissioners had said he would "listen to a request" for a zero rating to apply on a care and management basis until the necessary laws were in place.
This had already been done during the pandemic "in light of the very serious public health concern" so officials said there was a precedent for it.
"It is proposed that a request would be sent on your behalf to ask the Chairman of the Revenue Commissioners whether Revenue would consider continuing to apply the zero rate to supplies of Covid-19 antigen testing kits," the submission said.
"This would be subject to the same conditions that previously applied to the temporary application of this measure, until such time as the matter is put on a proper legislative footing," it added.
Officials said there was no need to seek a zero rating for Covid vaccines however, as the HSE were the sole purchasers of them.
They said as vaccines were provided to the public at no cost and the HSE was a state body, any reduction in VAT would have no impact on the exchequer.
"In the event this changes in the future, the matter can be reconsidered," said officials in the submission from January.
The department said it was not possible to say how much the zero rating of antigen tests would cost but that it was "not expected to be significant".
In comments on the submission, Finance Minister Michael McGrath wrote: "I support the continuation of zero rating of antigen tests for VAT purposes. Please proceed with the required letter to the Revenue Commissioners."
Reporting by Ken Foxe
