• Thursday, Feb 02, 2023
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Would VAT exemption make sanitary napkins more affordable?

  • Published at 05:30 pm July 4th, 2019
Sanitary napkins-Mehedi Hasan/Dhaka Tribune
Mehedi Hasan/Dhaka Tribune

More needs to be done to make the hygiene product more accessible, experts say

The government recently exempted the supplementary duty (SD) manufacturers were supposed to pay for importing the raw material to produce sanitary napkins – aiming to facilitate a decrease in the product’s retail prices. 

The decision came in face of strong urging by public health experts and women’s rights groups, in order to make sanitary napkins affordable for a wider range of users. 

The experts believe the government should also reduce the 15% value-added tax (VAT) on the consumer end to a minimum level, so the underprivileged women and girls can have access to the products. 

Under the newly passed VAT law, the minimum VAT on the sales of a product is 4.5%. 

Speaking to Dhaka Tribune, a local manufacturer said while the government initiative was laudable, unless it was properly implemented, the prices on the consumer end would hardly be affected. 

“This had been attempted before, but was not implemented by the authorities concerned, which is why we were unable to bring down the prices of the products,” the manufacturer said, requesting anonymity. 

He also stressed reducing the 15% VAT on the retail prices, saying that would be more effective in reducing the prices. 

The nationwide sanitary napkin business is currently worth nearly Tk300 crore, and it grows by 20% annually, according to market insiders. 

During market research, this reporter found that an eight-piece package of locally produced sanitary napkins is priced at Tk70-150. At present, some 12 companies in Bangladesh produce sanitary napkins, and supply about 80% of the products purchased by the users. 

The price of imported packages of sanitary napkins range between Tk110 to Tk500, depending on the sizes. Some five imported brands are available in the market. 

Sanitary napkins are 3% pricier at super shops. 

A necessity, not a luxury

With a healthcare system which is already struggling to provide proper service to all citizens, it is imperative that women and girls have access to sanitary napkins during menstruation, said Wahida Banu, executive director at Aparajeyo Bangladesh, a children’s rights advocacy group. 

Current prices put sanitary napkins out of reach for the poor, and in most cases they are resorted to use unhygienic means during their menstruation, which raises the risks of infections due to unsafe menstrual management, she added.

“A significant number of young girls miss classes in school due to this issue,” she further said. 

She said reducing the 15% VAT, as well as exempting the customs duty on the raw material, would greatly benefit in making sanitary napkins affordable to a larger number of women and girls – and fuelling women empowerment. 

According to Bangladesh National Hygiene Baseline Survey, conducted in 2014, only 14% women and girls currently using sanitary napkins during menstruation. 

“The number of users has more than doubled since 2014, based on the data we have,” said Nakib Rajib Ahmed, head of programs at RedOrange, an organization working to create awareness on safe menstrual management in Bangladesh. 

“If the prices go down, the use of sanitary napkins will massively increase across the country,” he told Dhaka Tribune. “Rural women and girls, in particular, will be greatly benefited.” 

Abdullah Al-Muyeed, head of policy and advocacy at WaterAid Bangladesh, said the prices of sanitary napkins should be reduced by 30%. 

“But in our country, we have often seen that, despite VAT exemption, product prices don’t go down. We need proper implementation of the government decision, along with the reduction of VAT on sales to make sanitary napkins more affordable,”  he added.

VAT on raw materials

Amid protests against a supposed increase in VAT on the raw material of sanitary napkins in the FY2019-20 national budget, the National Board of Revenue (NBR) issued a press statement on Wednesday, where they said no additional taxes had been imposed on the product this year. 

However, in the interest of better menstrual health, the government decided the exempt the existing SD and VAT on the import of the raw material. 

The total rate of different taxes on the raw material for sanitary napkins is around 127.8%. When the NBR decision is put into effect, around 60% of those taxes will be exempted.

NBR Second Secretary (VAT Act and Rules) Tariq Hassan said, through this initiative, they hoped the prices of sanitary napkins would come down. 

However, Dr Jesmin Jaman, marketing manager at Square Toiletries Ltd, said exempting SD would not help much in making sanitary napkins more affordable.

“The government should also reduce VAT on customs duty and sales tax,” she added. 

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