After being into controversies for last 18 years, ‘tampon tax’ has finally been knocked down today. The day marks the historical judgement by Australia’s treasurers who abolished one of the most hated tax applied on women’s sanitary products.
In the meeting held in Melbourne today on 3rd October 2018, the states and territory treasurers with federal Treasurer Josh Frydenberg decided to remove the 10% GST on sanitary items called ‘tampon tax’ with effect from 1st January 2019.
The government’s move to scrap the GST on feminine hygiene products will bring down the prices of tampon, thereby mitigating the unavoidable cost burden on Women.
Federal Minister for Women Kelly O'Dwyer stated “Millions of Australian women will benefit”. Discussing the proposed plan of ‘tampon tax’ removal, Ms. O'Dwyer said that its an unfair tax and the government believes that it should be scrapped.
Australian Women have been seen celebrating the victory over their long-held battle to get rid of the ‘unfair’ taxes on sanitary items. The GST exemption on tampon has come later than the exemption of tax on other comparatively less important health products including nicotine patches, sunscreen and Viagra.
Mr. Frydenberg told that there has been strong agreement among both state and Federal government regarding the scrapping of GST on feminine hygiene products therefore today’s decision was a mere formality to give it a final shape.
New South Wales Treasurer stated it was a long overdue decision. He said that though it will cost $10 million to NSW but it is for a good cause which should have been done even earlier.
This change in GST will cut government’s revenue of $30 million-a-year derived from tax on tampons and other feminine hygiene products. But to protect the interest of states and territories the government is set to provide an additional $9 billion support, informed Treasurer Josh Frydenberg. It has been heard that the plan was formulated to protect Western Australia from its share crashing to less than 30 cents in the dollar.
In contraction to the proposed plan, Victorian Labor Treasurer Tim Pallas said that the plan is more about fixing a “political problem” for federal coalition in Western Australia rather than bringing fairer distribution of Goods and Services Tax (GST).
Treasurers are into the ongoing discussion for the plan to introduce 75% floor in GST payments. However, the eastern states have been raising concerns on their less advantageous position under the deal.
In explanation to the proposed changes, Josh Frydenberg said that amendments are based on the data received from Productivity Commission and will place all the states and territories in a benefitting position with Victoria expected to get $425 million more under the plan.
Federal Labour has shown strong support to the GST reforms but has been concerned for the protection of states as government’s draft legislation has not provided for any. Mr. Frydenberg said that the government will try to create a “parallel system” but there won’t be any guarantee to this law.
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