The Price Women Pay

Rachel Corbally // 29 August 2018

Political classes on both sides of the Channel were waiting patiently for the end of the EU Parliament’s recess, and for Brexit negotiations to resume this week. Stakes are high on all sides but, in one way, uniquely so for women in Britain, given that any changes to the controversial 5% levy on sanitary products must remain at a standstill until negotiations have concluded.

Back in January, it emerged that reforms to EU law allowing the UK to apply a 0% rate on tampons would not come into force until January 2022 at the earliest – meaning that British women will be forced to pay the hated ‘tampon tax’ for at least another three years. Tampons are currently (and controversially) classed as ‘luxury items’, and so fall under the 5% VAT required by the EU.

However, in the face of mounting public concern about ‘period poverty’ and several high-profile PR campaigns, patiently waiting for change may no longer be an option.

‘Period poverty’ refers to the inability of girls and women to pay for sanitary products, which, in worst-case scenarios, can result in young women having to skip school to avoid the humiliation and stigma associated with periods. In the UK alone, the charity Plan International reports that more than 135,000 girls have missed a day of school due to difficulties purchasing sanitary products.

With inaction from government, private enterprise is taking matters into its own hands. Sanitary product supplier, Always, launched their #EndPeriodPoverty campaign in March 2018, which donates a pad for every pack purchased. In recent months, supermarket chains Tesco, Morrisons, and Waitrose have decided to bear the costs of this levy themselves by lowering prices rather than passing on VAT costs to consumers.

According to Always, more than half of women in period poverty believe it has affected their levels of success, confidence, and happiness. On a larger scale, one poll determined that those in period poverty are less likely to sit A-levels, and 20% more likely to struggle with employment, than those who can afford sanitary products.

The failure of UK politicians to abolish tampon taxes during the last two years – despite it being a deeply unpopular policy, and a stated aim of the Conservatives’ 2015 manifesto – is a measure of bureaucratic obstacles in our current legal system. But the tampon tax, and growing public awareness about it, has also exposed the ineffectiveness of the European Parliament, and other EU member states, in levying VAT.

The tax raises the price of feminine products to a legal minimum of 5%, which is what the UK currently levies, but in countries such as Germany, and Italy, the figure may be as high as 19%. Due to various historical and legal anomalies, only Ireland and the Canary Islands have managed to evade these requirements. Though political resistance to the ‘pink tax’ in the EU Parliament in 2015 and 2016 resulted in the freedom to lower the VAT on sanitary products to 5%, an action taken by both France and Britain, many other European countries have failed to reduce the tax.

For all the controversy it generates, the ‘pink tax’ does not appear to be a vital source of revenue to any developed nation. Canada, for example, removed its tax on sanitary products in 2015. While tampon tax revenue brought in $36,398,387 in 2014, the total VAT revenue increased by $5,908,000 in 2016, even without tampon tax revenue. Some of the VAT collected by member states goes directly to the EU budget. Total revenues from VAT taxes make up 7% of the EU’s GDP – though only a fraction of this comes from sanitary products.

Yet despite its insignificant effect on the balance sheet, the tax remains burdensome enough to impact the lives of thousands of girls. Its negative effects on women are well established around the world, such that it has even been abolished in some developing countries, like India and Nigeria. As we have seen, the existence of this unpopular levy represents a continued reputational headache for lawmakers in the developed world as well.

It may seem like a small thing, but abolishing the ‘luxury’ classification of this far from luxurious product would clearly demonstrate an EU-wide commitment to promoting gender equality.

EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).


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