Various youth groups have been demanding the revoking of taxes on menstrual hygiene products. Right now, 13 percent VAT is added to the price of menstrual hygiene products in Nepal, where accessibility and affordability of these products are low. Local manufacturers fear the removal of such taxes may flood the market with imported products.
Punit Kumar Sarda, CEO of Sarda Group, the parent company of Nepal’s first menstrual hygiene product manufacturer, Jasmine Hygiene Products, talked to Priyanjali Karn of ApEx on the manufacture and the taxation issues over sanitary products.
Can Nepal’s menstrual hygiene products alone meet local demand?
Yes, the local manufacturers of menstrual hygiene pads can meet the demand of all women and menstruating individuals in Nepal. We don’t need to depend on imported products.
The government hasn’t increased taxes on these products as it acknowledges that menstrual hygiene products are basic needs. The government has also been providing a 95 percent subsidy on raw materials needed to locally manufacture menstrual hygiene products.
Why have the prices of menstrual products been hiked if the VAT hasn’t been increased?
Imported products don't disclose the maximum retail price. That allows retailers and local shops to hike prices as consumers don’t have direct access to manufacturing companies. The companies themselves haven’t increased the prices.
The local manufacturers, however, have to mention the MRP, manufacture date, expiration date, name, and company contact on the packets of menstrual products and it is not easy for retailers to increase prices.
What would happen if the VAT on menstrual products is removed?
If the government revokes VAT, which is paid at the point of sale, the local manufacturers of menstrual hygiene products will be at a loss. They will still need to pay their taxes. But the retailers, on the other hand, will make more profits. This will lead to the downfall of local manufacturers as imported products will then flood the market.
Even if the government removes the VAT, the cost of a packet of pads may come down from Rs 40 to Rs 20, for example. But then we are assuming that those who couldn’t spend Rs 40 will be able to spend Rs 20, which may not be the case.
Why are menstrual hygiene products still branded as luxury items instead of essential items?
Menstrual products aren’t considered luxury products. Everyone knows menstrual products are essential and that is why the government is trying its best to supply them for free in schools and help local manufacturers minimize prices, mainly by supporting import of raw materials.
Why are most Nepali consumers more inclined to imported menstrual hygiene products over local one?
It is a stereotypical belief that products made in Nepal are not as good as imported ones. But if they weren’t good, why would Jasmine Hygiene Products still be selling after 15 years? We sell a product whose quality matches that of imported pads. Like any other company, we do have a price range, starting with the minimum of Rs 40. All products are of good quality and do the job just fine.