'Tampon tax' set to be scrapped in EU VAT deal, says Osborne

Sanitary products in the supermarketImage copyrightALAMY
Britain is about to secure a deal with the European Commission allowing it to scrap the so-called "tampon tax", the government has said.
VAT is currently charged at 5% on sanitary products, the lowest rate allowable under EU law.
Chancellor George Osborne said he hoped to announce it would be scrapped altogether "in the next few days".
He is under pressure from Eurosceptic Conservatives who want him to defy the EU and act unilaterally to scrap it.
More than 300,000 people have signed a petition calling for sanitary items to be exempted from tax altogether.
In his Budget on Wednesday, Mr Osborne said the proceeds of the tax would be distributed among women's organisations.

'Good progress'

But he is facing calls to ignore EU rules, with a number of Conservative MPs threatening to vote for an amendment to the Finance Bill in the Commons on Tuesday to allow the zero-rating of women's sanitary products.
Those campaigning for Britain to leave the EU in 23 June's referendum have been keen to highlight the role of Brussels in setting VAT rates.
Conservative MP Anne-Marie Trevelyan said: "I fear it may just be a statement that the EU is going to look at how we do VAT within nations - which isn't good enough. This is something that needs to be sorted out."
Mr Osborne, who wants Britain to stay in the EU, told the BBC Radio 4 Today programme: "I perfectly understand people's anger at paying the tampon tax.
"I said we would get agreement that we could reduce this rate to zero. I think we are on the verge of getting that agreement. I think we are going to get that agreement in the next few days, we hope."
Prime Minister David Cameron raised the issue with European Commission president Jean-Claude Juncker at the start of the EU summit currently taking place in Brussels, Downing Street said.
The PM's spokeswoman said the government wants to see progress on the move to a zero rate of VAT on sanitary products "as quickly as possible".
Labour MP Paula Sheriff has, meanwhile, tabled an amendment to the Finance Bill that would scrap the so-called "tampon tax". Labour will back the motion, which it said was attracting cross-party support.
She said: "Women's sanitary products are not a luxury. George Osborne failed to take the opportunity in his Budget to say that he would take the action called for by Labour and feminist campaigners and seek to get the 'Tampon Tax' abolished.
"But we now know that the European Commission is on the verge of offering the opportunity to do just that. George Osborne should work with Labour MEPs and other EU member states to ensure that this unfair tax is abolished once and for all."

VAT 'exception'

The European Commission said it was working on two options that would allow member states more flexibility over setting VAT rates.
A Commission spokeswoman said: "The Commission is aware of discussions in the UK regarding VAT rates on sanitary products.
"EU VAT rules are not imposed by the European Commission. They are decided on and agreed unanimously by Member States.
"Contrary to some media reports, tampons do benefit from reduced taxation."
She added that under current rules, member states were not allowed to apply a zero VAT rate to a product unless all other member states agree.
"Zero rates are an exception and run against generally accepted VAT principles. Most Member States tax sanitary products like tampons at around 20% or more," she added.
The Commission will next week set out two options to give member states more freedom to apply zero rates.

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