The 5% rate of VAT on sanitary products – referred to as the “tampon tax” – will be abolished from January, the chancellor will announce next week.
An EU directive meant the rate could not fall below 5% while the UK remains in the bloc’s customs union.
Since 2015, the revenue collected has been earmarked for charities working with vulnerable women and girls.
Campaigners welcomed the move but called for more help for “chronically underfunded” women’s charities.
Legislation has already been through Parliament to ensure the change can be made. The Treasury estimates the move will save the average woman nearly £40 over her lifetime, with a cut of 7p on a pack of 20 tampons and 5p on 12 pads.
VAT on sanitary products has been levied at various rates since 1973.
The Treasury said £47m had been collected so far and tax collected until the end of the year would continue to be put into the fund for charities.
But Vivienne Hayes, the chief executive of the Women’s Resource Centre charity, called on the government to pay the estimated £700m raised during the lifetime of the tax to be paid to women’s charities.
Campaigner Gemma Abbott from the Free Periods group welcomed the move to abolish VAT on sanitary products, saying the tax had “no place in a society that seeks gender equality”.
