U.K. Health Department Asks Treasury To Drop 17.5% Value Added Tax on Condoms
U.K. Department of Health ministers recently asked Her Majesty's Treasury officials to re-examine the possibility of dropping the 17.5% value added tax on condoms in the country to encourage safer sex, London's Guardian reports. Because the Treasury classifies condoms as "luxury" items, they are taxed at the highest VAT rate, according to the Guardian. The National Health Service spends about $7.86 million annually to purchase condoms and gave out 38 million free condoms in England in 2004. However, many general practitioners no longer provide free condoms, according to the Guardian. A three-pack of condoms in the United Kingdom costs about $3.64, including a tax of about $0.54. U.K. Chancellor of the Exchequer Gordon Brown has the option of applying a 5% tax on a list of items approved by the European Union, but dropping VAT on condoms altogether would require a new E.U. directive, according to the Guardian. The European Union is scheduled to discuss what items should be eligible for reduced or no VAT later this year. However, the Treasury currently is not lobbying for condoms to be included in that list, the Guardian reports. A health department spokesperson on Tuesday said, "We have held discussions with the Treasury on this issue and gathered a good deal of research and information," adding, "We are planning to revisit the topic with the Treasury shortly." A Treasury spokesperson said, "We will consider the Department of Health's point of view and actively engage with them. It's not something ministers will take lightly."
The health department's actions are believed to be in part because of a report released in October 2004 by the government-commissioned Independent Advisory Group on Sexual Health and HIV, which called for the tax on condoms to be lifted and for NHS to make more free condoms available. According to government figures released last week, 8,000 girls under age 16 became pregnant in England and Wales in 2003. House of Lords Baroness Joyce Gould, chair of the advisory group, said the tax should be dropped, adding, "The price of condoms is prohibitively high. They are certainly not a luxury; they are a health necessity." Lisa Power, head of policy for the HIV/AIDS advocacy group Terrence Higgins Trust, said, "The cost savings are clear -- the small amount gained by the Treasury in VAT on these items is dwarfed by the cost of treating poor sexual health. Each new case of HIV in the U.K. costs the country between [about $457,000] and [about $913,000]." The pharmacy chain Superdrug last week launched a campaign to advocate for dropping the tax on condoms. In a letter to Health Secretary Patricia Hewitt, the group said VAT is a "stealth tax on sex, (which) is a rip off." Superdrug has created an online petition and is dropping the price of condoms by 17.5% during its campaign (Curtis, Guardian, 6/7).