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Should the state pay for the citizens’ tampons?

My doctoral dissertation concerns the neutrality of value-added tax and the use of economic arguments. I am most interested in the use of economic arguments in the context of decision making. How we can use the arguments and if we use them, what is the relevance of them in the decision-making process? The dissertation focuses on the reduced rates (tax subsidy), which is why I am also interested in the state aid questions.

European Union law is based on the idea that the legal differences between the member states and their juridical system should not affect the competition or placing in the union.  This leads to the question, why is it essential to understand the concept of neutrality? Most often we focus on the neutrality of competition when neutrality is a concept that includes several aspects. We can talk about the neutrality of consumption or neutrality between industries – the list of different angles might be too long to list here so I leave that to the reader´s own curiosity.  A neutral tax will contribute to efficiency – how? It ensures optimal allocation of the means of production is achieved. And now, finally, we get to the question presented in the headline.

Neutrality in the tax system is typically considered to be one of the requirements in keeping the competition or the operation of the markets from becoming distorted. What is to be remembered is that taxation has other, non-fiscal purposes like advance business, employment, regional, revenue-sharing, or environmental policies. These purposes can be advanced by tax reliefs, which may lead to have a guiding effect on society.  So, the tampons and other women’s hygiene products are taxed by the general tax rate 24 % in Finland – there is no loss of income to the state but there has been discussion should it, should the state provide the users of those products a relief and reduce the tax rate down to 10 %, like it does for some products, for example, medicine. If that kind of change of regulation were to happen, we would encounter questions: what are the competitive products that should be included in the regulation – this is not always clear. This is one of the examples of why we need more systematization of the legal praxis.

The blog post is a part of social media course to shed some light on the area of study I am interested in.

Niina Långström
Doctoral student
Business Law
University of Vaasa

3 kommenttia artikkeliin “Should the state pay for the citizens’ tampons?

  1. Can only wish the best of luck with your dissertation, Niina! Such an interesting angle to look at taxation. Personally, I’ve learned only recently about so-called ’pink tax’ in the USA, as well as similar discussions that took place in different states. It appears that female consumers have to pay more for products and services when they are specifically targeted at women (getting a haircut is a good example). However, it is often diffult to decide whether it is unfair, and the European concept of neutrality seems to be very helpful. Hope your research will shed the light on equality among consumers, as well as merchants.

  2. Interesting question! And interesting to hear, what would be the other products in this category.

    What if the tax rate would be reduced? What would happening the prices? Shall the products be soon in Simola prices no matter the tax rate, and benefits goes to some else than targetted group of people?

  3. Extremely interesting topic!

    There would be definitely arguments for lowering the rate to the same as medicines – hygiene products are bought out of biological and social needs rather as pure consumer goods. The decrease could be justified also by the need for equal treatment of genders – women are now asked to pay for something for a long time period they cannot avoid.

    As per categorisation, I would suggest to consider products such as contraceptives, face masks and diapers. These appear to be generally purchased due to social necessity rather than personal comfort. With these products, there are also environmental concerns that could be addressed by taxation but I stick to the topic this time!

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