Policy Brief 16
Recent policy debates have increasingly focused on the gendered impacts of taxation, yet much of this work is rooted in high-income contexts, overlooking the realities of low- and middle-income countries where most individuals, particularly women, work in the informal sector. This policy brief highlights the significance of informality in understanding gendered tax burdens. By synthesising recent research, this policy brief explores how informal sector taxation affects men and women differently, its policy implications, and the research needed to advance a feminist fiscal agenda.
Key messages
- Informality is central to understanding gendered tax burdens. In low- and middle-income countries, the majority of both men and women work in the informal sector, with women concentrated at the bottom end of the earnings spectrum. To understand gender and tax dynamics, we must pay attention to how taxation actually affects most people – that is, through informal sector taxation.
- Informal sector taxation affects men and women differently. Gendered disparities in work structures, earnings, and caregiving responsibilities shape how tax policies impact women compared to men. Research shows that common means of taxing the informal sector are regressive, disproportionately impacting women given their concentration at the lower end of the earnings spectrum. Meanwhile, taxes can impact men and women differently, such as when certain sectors (e.g., markets) are disproportionately targeted by tax collectors in practice.
- A feminist fiscal agenda requires shifting focus away from informal sector taxation towards more progressive tax systems. Policymakers must consider the gendered realities of taxation in the informal sector to ensure more equitable and inclusive tax policies. Shifting attention away from informal sector taxation towards progressive taxation and the taxation of wealth will have positive impacts on income and gender equity.
