Yesterday, there was a vote to abolish the so-called 'tampon tax.'
Feminists started a petition, which took over like wildfire, campaigning to apply the zero rate of VAT (rather than the current, 5% reduced rate) to sanitary products. Most MPs voted against it and now there has been a public outcry on Facebook about how we're taxed for being women and the government is screwing us over on purpose and so on and it's made me quite annoyed. But not for the reasons you might think.
I worked in VAT for four years of my life. I qualified as a tax advisor. I know, it makes me sound like the most boring person on the planet. In reality, I was the most bored person on the planet - and that is why I quit, promising myself vaguely never to think about VAT again unless it went up to 500% or something in which case I might join in a protest. Normally, this is very easy, because most VAT cases interest 0.0001% of the population and use words that nobody has ever heard of like 'triangulation' on the regular – but in this case I feel compelled to speak.
What's the issue?
Essentially, sanitary products currently attract the reduced rate of VAT – 5%, in the UK; so you pay a 5% increase on the price, essentially. Unlike, say, contraception, which is zero-rated – in other words, the government don't make any money when you buy a box of Durex, but they do when you buy a packet of Always.
The argument is that this isn't fair. Zero rate sanitary products, the campaign is arguing, and make them cheaper for everyone. Right? Sure. So what's the problem?
The problem is the government can't.
Why not?
When we signed up to the EU, WAY BACK WHEN it was called the ECC or something and everybody was busy arguing about the Euro vs the Pound and English sovereignty and whether or not everyone from Poland was going to move in, we signed up to a homogeneous VAT rate. The idea is that, slowly, everyone in the EU starts to follow the same VAT rules. There is now EU VAT law which takes precedent over UK law. It doesn't mean we can't make our own laws; just that they need to fall in line with what everyone else is doing. If you think this causes slight issues for UK sovereignty, well, it probably does. But that's a different argument, isn't it?
So?
So when we signed up to this, there was a problem. The UK is the only country in the EU to have a zero rate. All other countries either reduce-rate products (with their idea of a 'reduced rate' ranging from up to about 15% in some cases) or exempt them, which is a whole other kettle of fish. The UK wanted to hold onto our zero rate – which we use to make things like food and children's clothes cheaper - and the EU wanted to take it away.
Eventually, we reached a compromise; we could keep the zero rate, but only on products that were already zero-rated. We can't add anything to it. Nothing. Not a dime. That's why companies go to court to find out if a jaffa cake is a biscuit or a cake; we can't just say 'oh, it's a cake, but whatever, zero-rate it anyway.' We need to know or we get in a lot of trouble.
But what about tampons?
Back then, sanitary products weren't on the list. And so it really isn't as simple as a couple of MPs clicking their fingers and zero-rating sanitary products.
Amazingly, until the year 2000, we paid the full VAT rate (20% now, 17.5% then) on sanitary products. At that point, the UK government made the sensible decision to add it to the reduced rate. The reduced rate of 5% on sanitary products is the lowest rate in the EU. In other words, in the UK we already pay less tax on sanitary products than anybody else in Europe. So it doesn't mean, as the tabloids have been glibly saying, that the government consider tampons a 'luxury product.' It means they tax them as low as they possibly can under the circumstances.
OK, we could potentially zero-rate sanitary products by leaving the EU; in my opinion, that's a bit like getting rid of a spot by setting your entire face on fire, but hey, if it's what you're arguing for, then fine – just be aware that's what you're arguing. You can't just say 'Oi, David Cameron, change it!' He can't. He doesn't have the power, no matter how many people sign a 38 degrees petition.
Can't he ask the EU?
Yes, and he has promised to do exactly that. The Treasury Minister has said he will raise it with the EC. So we've won in so far as it is possible to win this argument, which is why all these Facebook posts about how MPs are evil and misogynist are even more frustrating.
Now look. I agree one hundred percent that sanitary products should be available to everybody – nobody should be like, bleeding in the street. And to be honest, I always assumed you could go into a family planning clinic or a doctor's and pick them up if you wanted to, just like you can with condoms; it appals me if this is not the case. This is what we should be campaigning for; free sanitary products for those who need it. The VAT point is just completely confusing the issue.
I know this might be really boring to some people but I just wanted to make the point that sometimes, the government aren't screwing us over. Not often! But sometimes.
And now I'm going back to not thinking about tax. Phew. Thank god that's over. Anyone want a jaffa cake?
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