Gender aware tax policies have greater development dividends

A young Durban scientist is leading the charge in the fight for gender equity in science. Picture: Shelley Kjonstad/African News Agency(ANA)

A young Durban scientist is leading the charge in the fight for gender equity in science. Picture: Shelley Kjonstad/African News Agency(ANA)

Published Aug 21, 2023


By Varsha Singh

Gender empowerment extends far beyond the notion of mere equality. Implementing effective gender-aware policies can act as a catalyst for transformative societal change, aligning with the objectives set for Sustainable Development Goal Five (SDG 5) while also bolstering domestic resource mobilisation for development.

One area where the dividends of equality are particularly pronounced is in reforming tax systems to foster gender-equal economies.

The World Bank highlights the stark income disparities women face compared to men. Women often encounter unpaid or poorly paid work, predominantly in the informal sector, resulting in a stark contrast in formal employment rates with men. Additionally, women tend to earn approximately 20% less than men, as revealed by the ILO Global Wage Report 2018/19, with variations across countries. These gender discrepancies are often overlooked in gender-blind policies, but acknowledging them can have a tangible impact on development.

Research by the African Tax Administration Forum (ATAF) on tax policies reveals that governments often struggle to fund programmes aimed at promoting gender equity. Many tax policy measures neglect the informal economy and the significant role women play in it, while unpaid work remains largely disregarded. The study identified evidence of efforts to address explicit bias in the tax systems of the 16 countries examined but noted the existence of implicit bias.

To ensure tax policies consider evolving gender roles meaningfully, tax administrations must address gender-specific barriers to tax compliance and administration. Simplifying tax processes, offering gender-responsive guidance and assistance, and providing compliance flexibility to alleviate burdens on women, especially those with caregiving responsibilities or limited resources, are crucial steps in this regard.

Several entry points exist to foster gender-responsive tax systems, such as gender-disaggregated data collection and analysis, gender mainstreaming in policy design, reviewing tax exemptions and deductions, promoting women’s economic empowerment, strengthening tax compliance and administration, and fostering collaboration with stakeholders for a comprehensive approach.

Our research showed a number of countries that are already leading the way. The implementation of Rwanda’s 2021 gender strategy, for example, has resulted in at least 30% representation of women in decision-making organs and a 61.3% proportion of women in Parliament.

On the domestic tax front, the Zimbabwe Revenue Authority (ZIMRA) launched Taxpayers’ Self Services Facilities with one of the main aims to simplify engagement with the Tax Authority for the taxpayer. This had the added benefit of providing female taxpayers with ample time to attend to other duties normally associated with them.

In South Africa, the South African Revenue Services has made gender central to human resources by putting in place a Women’s Empowerment and Gender Equality Steering Committee that has access to gender-aggregated data in its human resource decision-making.

So, it is clear that by integrating gender considerations into tax policy design and evaluation, tax administrations can ensure greater equity and inclusivity.

Focusing on tax policies presents a significant opportunity to advance gender equity by addressing systemic biases and discrimination faced by women in society. The African Tax Administration Forum (ATAF), through the ATAF Women in Tax Network (AWITN), is actively engaging stakeholders to create gender-equal environments that enable every member of society to thrive and enjoy a decent quality of life, regardless of social labels.

Numerous studies demonstrate the developmental dividends of gender mainstreaming. The International Monetary Fund, for instance, acknowledges that reducing gender disparities is linked to higher economic growth, greater economic stability and resilience, and lower income inequality. Recognising the critical importance of this recognition, especially during global shocks like the pandemic, underscores the urgency to achieve SDG 5, which strives for equal rights and opportunities for men and women in all aspects of life.

Reaching SDG 5 for gender equality will pave the way for a more inclusive and fair society, enabling all individuals to contribute to their communities’ development, regardless of gender. In turn, achieving SDG 5 will not only empower women in tax and gender matters but also facilitate domestic resource mobilisation for local development, leading to improved infrastructure, health, education, and support systems.

Ultimately, seeking dividends for gender will lead to dividends for development, forging a more prosperous and equitable world for all.

* Varsha Singh is African Tax Administration Forum (ATAF) Head of Strategic Planning and International Cooperation and serves on the ATAF Women In Tax Network (AWITN) Board.

** The views expressed do not necessarily the views of Independent Media or IOL.