Tax and Gender
This learning package is based on K4D’s Tax and Gender Learning Journey, which ran with the UK’s Foreign, Commonwealth and Development Office (FCDO) from 2021 to 2022. It had objectives to introduce and grow awareness of gender issues in taxation, create consensus around priorities for tax and gender policy and build the capacity of staff in the FCDO to understand, apply and communicate the department’s reshaped approach to tax and gender programming.
Tax is increasingly viewed through a gendered lens, in terms of reducing discrimination and promoting women’s economic empowerment. However, gender programming in many organisations’ tax programmes has been largely absent. This contrasts with other areas of development, where gender is often well-established and regarded.
The consequences of tax policies on gender are mostly linked to implicit biases in many policies relating to small and micro enterprises, informal taxes, and asset and property taxes.
- There has been insufficient research on the gendered implications of recent trade tax cuts and changes in personal income taxes, as well as the role of small business formalisation and taxation. However, based on the limited evidence available, it is believed that tax policies in developing countries may be biased against women.
- Countries are increasingly raising revenue through regressive taxes that are biased against women’s livelihoods (and care responsibilities), while sacrificing tax revenues due to business incentives (for example, allowing tax avoidance) offered to large corporations, transnationals, and high-net-worth individuals. Consumption taxes, for example, are regressive and can impose a disproportionate burden on women and other marginalised groups while providing tax breaks and lax enforcement for large corporations and transnationals. Small and micro business taxation, informal taxes and fees, and consumption taxes such as Value-Added Tax (VAT) are all critical issues for women living in poverty in the global south.
- Governments can use tax policies to improve the economic status of women by incentivising the participation of the labour force, ownership of land assets, and the growth of women-owned businesses, in addition to removing implicit biases against women.
- At the same time, governments should use tax policies to reduce gender biases (for example, enrolment of girls in school or childcare costs) by not raising revenue through user fees and properly resourcing public services.
However, tax policies are only one aspect of gender inequality; the implementation and enforcement of tax policies carry another aspect of inequality. Women are more likely to be at a disadvantage than men because they tend to be less economically literate, less knowledgeable of the law, and more vulnerable to harassment.
Generally, because of differences in tax rates, obligations, exemptions, and cultural and social patterns of economic activity by women, determining whether these biases are good or bad for women must be made on a case-by-case, country-by-country basis.
The resources below have been selected due to their relevance to the learning package. Explore them to strengthen your understanding of tax and gender.