On Tampon tax: Outside the EU we could set our own VAT rules and act immediately rather than beg for EU concessions that could take years to implement – UKIP MEP Louise Bours
UKIP Press Release
•UKIP MEP Louise Bours said:
“Outside the EU we could set our own VAT rules and act immediately rather than beg for EU concessions that could take years to implement. David Cameron having to plead for change just shows how weak and dependent he is on the EU. Let’s vote to get out in June and control our own affairs.
“Under the current EU VAT rules (VAT directive) it is impossible to reduce an item to zero rate. No matter what was agreed in principle at the EU Council- that is the current EU law. These proposed changes on VAT rules will have to be proposed by the Commission, voted on by the European Parliament and agreed on by the Council. It could potentially take years.
“If we were outside the EU we could have decided to scrap the tampon tax years ago, instead we will now have to wait for the EU bureaucracy and legislative process to take its course, which could take years. It is completely outrageous the undemocratic EU gets to decide and set our tax rates in such a way.”
Under the current EU VAT rules (VAT directive) it is impossible to reduce an item to zero rate. No matter what was agreed in principle at the EU Council by Cameron - that is the current EU law.
The Commission underlined this in an answer a question to UKIP MEP Louise Bours "Introducing zero VAT rates for sanitary items would not be in line with the VAT Directive."
The only way round it would be to amend the VAT directive itself.
It could be done in theory in two ways:
1. Include a specific reference in the directive allowing zero rate on sanitary items or
2. Create a mechanism to allow a change in the rate of products to zero rates.
The Commission has said it will be reviewing the VAT directive sometime in 2016. It is reported the Commission could issue a proposal as soon as next week.
Even if they started the amendment immediately it could take years to get any agreement on amending the VAT rules. If the 2nd option was taken, it could mean the Commission would have to produce another proposal possibly taking further years of legislative process. Or perhaps a system of EU approval for Member States to act.