THE BLOG

Women Need Tax Justice More Than Once a Month

07/04/2016 17:25 | Updated 07 April 2016

In his recent budget, George Osborne sought to become the menstruating woman's friend. He promised to abolish the 'tampon tax'. But the real reason the chancellor felt able to make this commitment was because the European Commission is beginning a process to update the VAT Directive. The new EU VAT package, launched today, will include proposals to loosen the uniform rules governing VAT and will enable individual countries more flexibility in the rates they charge.

Currently the VAT paid on sanitary products is set at 5%, the lowest rate permissible under the EU's VAT Directive. This limit has enabled Osborne to appease his Eurosceptic colleagues by giving the impression he is standing up for Britain and taking on meddling Brussels bureaucrats. But in fact, there has always been flexibility and VAT is not uniform across the single market. When the VAT Directive was last negotiated in Brussels in 1991, the then UK Tory government asked for a long list of exemptions. This did not include tampons and towels.

The Commission is proposing two options for reduced rates of VAT. It proposes extending and regularly reviewing the list of goods and services eligible for reduced rates, or, abolishing the list altogether, allowing greater freedom for national governments to set reduced rates. The problem with a VAT free-for-all is that it could create unfair tax competition between national governments, and potential VAT fraud.

As Greens we want to build a Europe that works for everybody, not constantly portray the union as a battle between countries. So we will continue to campaign for tampons, towels and mooncups to be VAT zero-rated in all European countries. With a consultation included in the review of the directive, we will need as many people as possible responding and calling for an exemption for sanitary products.

There is also a long way to go before greater flexibility becomes law; something unlikely to happen before early 2017. We will be piling on the pressure in the European Parliament in order to guarantee justice for all women throughout Europe, not just Britain. We need politicians in all 28 member states of the EU to agree to zero-rated VAT on sanitary products.

When we do achieve an end to the tampon tax across the EU it will be the result of dynamic inspired campaigning by thousands of European women. As for Osborne, he must be left in no doubt that many of his tax and spend policies impact disproportionately against women and cancel any gains they may make from removal of VAT on sanitary products.

The world's wealth is disproportionately male. According to a 2011 World Bank report women represent 40% of the labour force but hold just 1% of the world's wealth. In January Oxfam released figures showing the top 62 billionaires in the world own the same wealth as half of the world. If we look at these 62, just 9 of them are women. Likewise, when it comes to the CEOs of multinationals and board members of the FTSE 100, women are vastly underrepresented. It would also be interesting to analyse the recently revealed Panama Papers to find out what proportion of the wealthy elites exposed as exploiting secretive offshore tax regimes to avoid paying their fair share of tax are male. It is probably safe to bet they are almost all men. What we do know for sure is more than half the companies listed in the documents are registered in British-administered tax havens or the UK itself, making a mockery of Osborne's claims to be cracking down on tax avoidance.

When wealthy individuals or companies are not taxed effectively - or corporation tax is reduced as it was in the recent budget - their wealth increases. This not only widens the gap between rich and poor, it widens the gap between men and women.

Furthermore, the huge austerity cuts Osborne has imposed since 2010 have hit women hardest. Cuts to public sector jobs and pay freezes have impacted more on women, since 65% of public services workers are female and benefits make up one fifth of women's income, compared to one tenth of male income. In total, 74% of welfare savings made so far have come from women's pockets and this looks set to increase still further. If you add to this the fact that there have been specific cuts to women's refuges and other services which support women facing domestic violence and abuse we see how dangerous and damaging austerity policies are for women. So tax cuts, largely benefiting men, and spending cuts, disproportionately impacting on women, exacerbate gender inequality.

Osborne must realise that genuine tax justice for women is not a once-a-month occurrence. It must cut across all tax and spend policies, universally, and help rather than hinder the fight for gender equality.

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