ICTD Summary Brief 6
This ICTD Summary Brief is the sixth in our six special research synthesis pieces, produced at the end of the ICTD’s first five-year funding period in Spring 2016.
This brief explains what we have learned about gender and taxation and looks at: why taxation is relevant for gender; where gender is relevant in taxation; bias in tax structures; amongst other themes.
Why is taxation relevant for gender?
The recent increased interest in taxation in the developing world has been accompanied by an interest in the gender implications of tax systems. There is some literature on gender and taxation in general, but very little on developing countries. The literature is motivated by an observation that tax structures are not neutral, and are often biased against the interests of women. However, overall, the biases most commonly found in rich countries, which relate to personal income taxes, are not very significant in developing countries because so few people, particularly women, pay personal income taxes. Moreover, how tax reforms affect men and women will depend partly upon incidence patterns of the overall tax regime that the reforms replace. Further, and most importantly, the effects of tax policies on men and women depend upon policies in other arenas – most closely with budgeting and expenditure, but also with employment, education, and social and cultural norms.
Thus, advances in gender equality depend upon policy changes in several areas – and taxation is only one part of the bigger picture. Nevertheless, the gender
lens highlights potential opportunities for improving substantive equality for women, and has proved to be useful in raising some important questions for further research. Before looking in more detail at the gender dimensions of taxation, it is useful to list the four main economic domains or areas in which feminist-inspired researchers have identified
significant material gender inequalities.
- Unpaid care. Throughout the world women bear a disproportionate share of the responsibility for looking after the household, and caring for children and dependents. In some countries they are also in charge of subsistence production, such as food production. These responsibilities are usually in addition to any income-generating employment that women might engage in. The burden of unpaid care greatly constrains women’s time, restricting their participation in social, economic and political life, in addition to reducing their wellbeing and health outcomes. Taxes matter here to the extent that the overall level of taxation impacts on the level of public spending on certain kinds of services that will otherwise have to be provided by women in the home.
- Paid employment. In developing countries women are less likely to be in the labour force, and, when they are, more likely to be in the informal sector. As a recent UN Women report shows, less than a quarter of the women in the Middle East and North Africa region, and around one-third of the women in South Asia, are part of the working population. These already low labour force participation rates drop significantly during women’s childrearing years. In addition, women everywhere earn less than men once age and education are taken into account. Moreover, women’s employment is largely in the informal economy, in underpaid, precarious and frequently risky jobs. For example, in sub-Saharan Africa only 11 per cent of women in the labour force are part of the formal sector, as compared to 17 per cent of men. Thus, policies for taxation of the informal economy are important to understand gender effects.
- Household decisions about savings and consumption. There is substantial evidence showing that women tend to spend more of the income under their control on goods that contribute to the social reproduction of labour, including healthcare, education, food, and care of children and the elderly. Changes in the price of these goods (due to tax policies) can lead to a reduction in consumption, substitution of better quality goods by inferior ones, or to domestic production of these goods within the household by women (thus increasing the burden of unpaid care).
- Property and asset ownership. In many developing countries women do not hold formal title to assets and property. This gender gap is particularly acute in the case of land. Lack of ownership affects women’s capacity to earn a livelihood and cope with adverse events (e.g. widowhood). The tax implications of such land and asset ownership patterns are unclear. However lowering tax rates for women-owned or jointly-owned real estate or assets might provide an incentive to register property in women’s names, thus increasing their control over assets to some extent. Thus, in the four domains outlined above there are substantial differences between men and women in terms of access to resources, power and responsibilities, and economic opportunities, which are underpinned by social and political institutions. Tax regimes can dampen or exacerbate these differences, depending upon the context.
