The United Kingdom is expected to abolish the so-called tampon tax at the end of 2020, as the Brexit transition period comes to a close.
Chancellor of the Exchequer Rishi Sunak is planning to announce termination of the tax, to be effective from next January 1, in the new budget, reports Independent.
Under current EU laws, tampons and sanitary towels are classed as luxury items as opposed to essentials. This means member states in the EU cannot reduce the tax rate below five per cent.
The move is estimated to save the average woman almost £40 in her lifetime, thanks to a 7p reduction on a pack of 20 tampons and a 5p reduction on a pack of 12 pads.
The tampon tax has been criticised for fuelling “period poverty”, which refers to those who have limited access to sanitary products because of financial constraints.
In 2015, the government pledged to give back the money collected from VAT on period products to women’s charities. This was known as the Tampon Tax Fund.
However, women’s organisations have criticised the way this has been handled.
Despite £62m having been allocated since the scheme was launched, the Women’s Resource Centre says much of the money has been given to large charities and housing associations without a vested interest in women’s issues, leaving the specialist organisations struggling for cash.
Those who have campaigned for the government to put an end to tampon tax have welcomed the move but expressed concerns over what will now happen to the tampon tax fund.
Vivienne Hayes, chief executive of the Women’s Resource Centre charity, said: “We are over the moon to learn of this news, tampons and sanitary towels were never luxury items and should never have been subject to VAT.
“Congratulations to all the women who campaigned so long for this ridiculous and unfair tax to be removed.
“We are concerned that the tampon tax fund will now be abandoned by the government and we hope to see a replacement fund for women’s health and support charities announced in the near future.”
Ms Hayes added that the government should spend the amount of money that has been raised during the tax’s lifetime should be given to women’s charities.