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Deal reached to scrap 'tampon tax', officials say | Deal reached to scrap 'tampon tax', officials say |
(about 1 hour later) | |
EU leaders have agreed a deal that will allow the UK to scrap the so-called "tampon tax", British officials say. | |
Two options have been put forward that would permit a zero rate of tax on sanitary products. | |
It comes amid the threat of a backbench rebellion following the Budget from Eurosceptic MPs over the tax, currently at the lowest rate allowed by EU law . | |
Chancellor George Osborne had pledged to spend the proceeds of the tax on women's charities. | Chancellor George Osborne had pledged to spend the proceeds of the tax on women's charities. |
VAT is currently charged at the reduced rate of 5% on sanitary products - but more than 300,000 people have signed a petition calling for sanitary items to be exempted from tax altogether. | |
At the European Council summit in Brussels, the 28 leaders agreed a statement welcoming "the intention of the Commission to include proposals for increased flexibility for member states with respect to reduced rates of VAT, which will provide the option to member states of VAT zero-rating sanitary products". | |
BBC chief political correspondent Vicki Young said it appeared the government had managed to avoid a Commons defeat by reaching the agreement. | BBC chief political correspondent Vicki Young said it appeared the government had managed to avoid a Commons defeat by reaching the agreement. |
A number of Conservative MPs have threatened to vote for an amendment to the Finance Bill in the Commons on Tuesday to allow the zero-rating of women's sanitary products. | A number of Conservative MPs have threatened to vote for an amendment to the Finance Bill in the Commons on Tuesday to allow the zero-rating of women's sanitary products. |
Earlier Mr Osborne said he understood people's anger at the tax, and said politicians were "on the verge" of a deal to reduce it zero. | |
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. | 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. |
Mr Cameron raised the issue with European Commission president Jean-Claude Juncker at the start of the EU summit, Downing Street said. | |
Labour MP Paula Sheriff, who has tabled the Finance Bill amendment, 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." | |
VAT 'exception' | VAT 'exception' |
The European Commission said it was working on two options that would allow member states more flexibility over setting VAT rates. | 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: "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." | "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 agreed. | 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 agreed. |
"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. | |