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There has been a heated row over ‘Tampon Tax’, which is the five percent VAT on sanitary products. According to the Telegraph, university students, charity workers, and working women have been vocally protesting against this tax on social media and on the streets.
This tax has been imposed by the EU.
Around 250,000 petitions were signed to abolish this tax, when Britain joined the European Union, the nation became obligated to follow EU regulations, which includes Value Added Tax.
According to European Union Explained, in 1977, the EU decided what products are to be taxed, the amount of tax to be levied, and also the list of products exempted from VAT for its members. This was to make business easy to business across borders.
The British government has no role to play in this decision. But when Britain joined the EU, it reached an agreement that those items which remain tax free, will be exempted from VAT.
Tampons weren’t included in that list.
Why weren’t tampons included in the list?
VAT is imposed on items which are considered ‘luxury items’. As women menstruate once a month, tampons ar seldom used, hence they are considered luxury items.
What can Britain do abolish this tax?
The Financial Amendment Bill which was introduced in the parliament by the Labour Party, which suggested that this tax should be abolished, was not passed.More than 270 MPs from both parties were in favour of this bill.
The Conservative Party claimed that they weren’t against the removal of this tax.But they couldn’t single handedly get rid of it either.
If the UK wants to end this tax, it needs to negotiate with the EU, and get its approval.The EU refuses to change its position on this, but has agreed to do a review in 2016.But it is highly unlikely that tampon tax will be abolished.
The EU has made it clear that the VAT can’t be lowered below 5%. This has outraged the protestors.
Items that are exempted from tax
Books, Jaffa Cakes, Biscuits and nuts in a shell are exempted from tax.
These items were considered a luxury at the time, and very few people owned these items. Hence, these luxury items were not taxed.
While many women argue that tampons, should a right, not a ‘luxury’, as it is impossible to function without tampons during their time of the month. So far, there has been no update on this issue since October.