Sunday, 3 January 2021

One small step for womankind and one giant leap for mankind

From the BBC:

The 5% rate of VAT on sanitary products - referred to as the "tampon tax" - will be abolished in the UK from 1 January.

EU law required members to tax tampons and sanitary towels at 5%, treating period products as non-essential. Chancellor Rishi Sunak committed to scrapping the tax in his March Budget.

Campaigners welcomed the end to what they called a "sexist tax" with activist Laura Coryton saying it was "about ending a symptom of sexism".

I'm not really sure that VAT on tampons etc is 'sexist' (it's borne by the manufacturer and retailer, not the consumer). I'm not sure how you are supposed to distinguish 'essential' from 'non-essential' or even what relevance that distinction has (in VAT law, it is irrelevant), but who cares?

VAT is the worst tax we have, for a variety of reasons, so the more things they exempt the better.


Sobers said...

"I'm not really sure that VAT on tampons etc is 'sexist' (it's borne by the manufacturer and retailer, not the consumer)."

Surely on a product such as this which is not a discretionary purchase, the incidence is more on the consumer than the producer/retailer? The test will be whether average prices in the shops reduce or not after the VAT cut. If they do then the incidence was on the consumer, if they stay the same then the incidence was largely on the producer/retailer. Its got to be measurable surely?

Mark Wadsworth said...


a) It is to a large extent discretionary. You can buy Tesco basic pads (cheap) or branded tampons with applicators (pricey) etc. So while demand overall for these things is fixed, consumers still have a lot of choice between cheap and pricey.

b) I have done this test many times. When they switched VAT from 17.5% to 15% to 17.5% to 20% in the space of four years, supermarket gross margins went up or down accordingly. You can do the same for RPI of VAT-able and exempt goods. Inflation in both indices was the same for both categories in the same four year period. Data from the USA shows there is absolutely no correlation between retail prices and local sales tax rate.

c) If you take the extremes of inelastic demand and and inelastic supply (booze/fags and land), you find that taxes on booze/fags are borne nigh on 100% by drinkers/smokers and taxes on land are borne nigh on 100% by landowners.

I work on the basis of observing real life and then working out the underlying reasons. Others just make up explanations and ignore all evidence that disproves it, or more often, they don't even both looking at evidence.

mombers said...

VAT on labour is what really irks me, especially the low paid. Top to tip to Rishi: reduce the working age welfare bill by not taking so much private property away from people that they end up in poverty

Bayard said...

Good to see the myth that VAT is a tax on non-essentials backfiring on the mythmakers.

QDanT said...

a few years ago the granddaughter called and I asked "you wouldn't have a Tampax on you by any chance ?" she pulled a fancy case out of her handbag,it looked like a cigar case,and with a quizzical look offered me one. So I stripped my Zippo petrol pipe lighter, new wick, flint and wadding (tampax cotton)fueled it and lit my pipe laughs all round. Top tip it's more absorbent than a cotton wool ball :-)

Mark Wadsworth said...

M, agreed.

B, they had to invent the excuse 'essentials' to justify the exemptions for land and finance.

QDT, that was a bit cheeky, but at least she saw the funny side :-)

Mark Wadsworth said...

M, actually it's worse than that. VAT pushes down wages and destroys businesses and jobs, so causes a lot of the poverty in the first place.

Dinero said...

Wow big price rise on Postage stamps today.

Dr Evil said...

When is this EU funding tax, VAT, going to be abolished?

Mark Wadsworth said...

D, it's privatised so they take the piss.

DrE, if it were up to me, it would be abolished this evening and LVT introduced tomorrow to balance it out.