192015Nov

The so called ‘Tampon Tax’

Tampon
Earlier this month there was a vote in Parliament on the so called ‘Tampon Tax’. I have received, and am continuing to receive, hundreds of emails from constituents claiming that I believe tampons to be a ‘luxury item’ and how I am not standing up for the ‘sisterhood’.

I want to explain why I voted against the ridiculous motion that Labour put forward.

I can assure you that I, like most other women in this country and in Parliament, know full well just how vital and indeed essential tampons and all sanitary products are. The assertion that I see these goods as ‘luxury’ is frankly absurd.

I want to see a change to the VAT rating on tampons, and think it is in fact essential that we achieve this, but I do not want them to be VAT exempt as the Labour Party’s motion suggested. Labour’s calls for tampons to be VAT exempt shows their complete lack of knowledge about the tax system. Making sanitary products VAT exempt would be counter-productive and would in all likelihood see an increase rather than decrease their overall price.

On VAT exempt products manufactures are not able to claim back the VAT on the component products used, or on any spend for distribution or marketing – they can currently claim back the full 20%. Do we really think that this loss of reclaimed tax would be stomached by these businesses or do we think that it would be passed onto the consumers to ensure that their overall profit margin is maintained? With this in mind we need them to be classified rated as ‘zero rated’ VAT products – a subtle but critical difference – so that we do actually achieve a reduction in the price. Zero rated products would enable the manufacturers to claim back the full VAT on their production costs.

The Government cannot just introduce a new zero rate as this would require a change to EU VAT legislation, which would need a proposal from the European Commission and the unanimous agreement of all 28 member states. This is, to put it lightly, no mean feat. Labour should know this all too well but have seized upon the issue to try and make political capital.

The way that we can achieve autonomy on our VAT rates is through the Prime Minister’s EU renegotiations. Any attempt to make demands on the EU to make an exception for tampons is not credible or feasible unless it is part of an agreed renegotiation package.

So I hope this assures those who have sent me angry emails, tweets and Facebook messages that we share the aim of removing VAT on sanitary products, but the way that the Labour Party attempted to do it was incompetent, impractical and potentially illegal under European Law – which is why I voted against their poorly thought through, badly worded and politically motivated motion.