The fact of the matter is that Europe has a sluggish birth rate and supporters say that aspiring parents should be incentivised. However, the 25-member commission remains divided:
Opposers argue that nappies should not be classed essential medical products, which are immune from VAT, and stand firm.
Applying VAT to various products and services has been the subject of debate and discussion for many years and these have involved subjects such as restaurant bills.
The Financial Times reports that tax commissioner Laszlo Kovacs wants to take action against five countries that do not charge VAT at the minimum rate of 15% as stipulated by EU directives.
Those contries classed as the 'offenders' are the Czech Republic, Hungary, Malta, Portugal, and Poland.
Mr Kovacs has pointed to a recent legal ruling, which concluded that nappies were not considered as medical items, which should be immune from VAT, to back up his argument.
His opposing commissioners may prove to be a powerful force who all believe that the financial benefits of such taxes pale by comparison to Europe's long-term demographic needs.
Social affairs commissioner Vladimir Spidla is leading the opposition to the plan, which will go out to consultation before any moves are made.
"It is absurd to impose a burden on families, especially since 'nappies' (incontinence products) for old people benefit from reduced VAT rates," quoted an official close to Mr Spidla.
British parents currently pay no VAT on nappies, based on an agreement at the time of Britain's entry into the European Union.
July 2006
|
