UK to abolish the ‘tampon tax’

UK to abolish the ‘tampon tax’

Part of: GS Prelims and GS-I- Society; GS-III- Economy

In news 

• The UK began 2021 by abolishing a 5 per cent Value Added Tax (VAT) on women’s sanitary products, often referred to as the “tampon tax” and which many activists had described as sexist.
• It now joins the list of countries which have already eliminated this tax, which includes India, Australia and Canada.

Key Highlights

• Until December 31, the UK was a part of the EU, where period products such as sanitary napkins and tampons are classified as non-essential, and member states are required to levy a 5 per cent tax on them.
• Now that the UK is out of the 27-member bloc, it is not bound by its directives, under which sanitary products had been subjected to five different VAT rates since 1973– with the lowest 5 per cent slab being applicable since 2001.
• The removal of the tax has thus been praised by women’s right activists and Brexit proponents at the same time.
• EU itself has been in the process of removing the tax on period products. In 2018, the bloc published proposals to change the tax rules, but these are yet to be accepted by all members
• The British government has estimated that the move to abolish the tampon tax would save the average woman about 40 pounds during her lifetime – as a pack of 20 pounds will be cheaper by around 7 pence and 12 sanitary pads by 5 pence.