The “Tampon Tax” is set to be abolished, George Osborne declared today.
He said the European Commission was “on the verge” of granting permission for the Treasury to reduce VAT on sanitary ware to zero.
The Chancellor predicted an announcement “in the next few days” - conveniently in time to prevent a Tory rebellion against the tax spilling over into the EU referendum.
The Government faced a cross-party Commons bid to demand that Britain defy European rules by acting unilaterally to withdraw the charge.
Several Conservative MPs, including campaigners for a Brexit, are 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.
However Mr Osborne indicated that it may be unnecessary, telling BBC radio: “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.”
Tory MP Bernard Jenkin said the Commission appeared to be changing its rules to avoid a backlash in the June 23 referendum. “So, do we need an EU referendum every year to have a chance to cut an EU tax Parliament votes against?” he tweeted.
Under European rules, VAT cannot unilaterally be abolished on a product after it is applied for the first time.
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