UK media said that the new Chancellor Rishi Sunak, first Indian-origin finance minister of UK, is planning to end the widely-unpopular tax on women’s sanitary products with the Brexit transition period at the close of the year.
Rishi Sunak who is currently preparing to present his first budget on March 11, is reportedly set to scrap the 5 per cent rate of VAT on women’s sanitary products. This tax is called as the "tampon tax" and he wants to abolish this unpopular tax from January 2021, according to UK media reports.
A European Union (EU) directive meant the rate could not fall below 5 per cent while the UK remains in the economic bloc's customs union and therefore is free to change it as a non-member at the end of the Brexit transition period in December.
Legislation has already been through Parliament to ensure the change can be made. The UK Treasury department estimates the move will save the average woman nearly GBP 40 over her lifetime, with a cut of 7p on a pack of 20 tampons and 5p on 12 pads.
The 39-year-old Sunak is the son-in-law of Infosys co-founder Narayana Murthy. He is also commited to ensure that millions of people have access to cash through enough cash points as digital payments catch on.