What you need to know:
These are not the only recommendations for a just tax structure that also promotes gender equality.
One of the canons of taxation we covered during my undergraduate studies in the “Taxation Economics and Policy” module was equity. This canon of equity in simple terms means that a tax must be based on the principle of equity. That is taxes need to be fair such that each payer contributes their fair share to the revenue basket cost of government and furthermore, the tax must be levied according to the tax paying capacity of the individual. However, throughout this class, we did not cover taxation from a feminist lens. We considered the variation in the impact of every tax policy on the rich and the poor but never considered the gender impact of their variation in policy.
In many countries, the current tax structures result in women paying more taxes than men and yet the women in the official labour market are fewer and benefit less from public services available. Ironically, these are the same services which women heavily rely on.
The tax structure in the global south countries unfairly and disproportionately relies more on the informal sector. For example, in Kenya, the informal sector is the largest employer of women in the economy. The taxes and levies applicable to a small and medium enterprise in Kenya include but are not limited to; a business permit, turnover tax, income tax, withholding tax, digital services tax, and value-added tax etc.
Many companies and business enterprises are owned and led by men. As a result, governments offer subsidies meant for all SMEs to benefit men, not particularly for women. Secondly, women are the breadwinners and biggest spenders on heavily taxed consumer goods. When we look at daily domestic consumption of food and other household necessities, the majority of women are placed here and this is sadly where the bulk of taxation resides.
Ironically, often, advocacies for women empowerment and tax justice are separate issues or left only for tax policies.
Government officials will most likely dismiss feminist taxation advocacy as a feminist agenda. But, unfortunately, you cannot remedy what you do not know or understand.
Our governments need to assess the gendered impact of tax by gender. This assessment will identify the direct and indirect effects of taxes and the utilization of taxes. It is also essential to determine if women benefit from the taxes collected through government spending on the most important public goods and services for women.
The next step is to have gender-responsive budgeting. This is when the government ensures that tax revenues are raised and spent to promote gender equality.
Lastly, governments have been overtaxing because of the successive annual budget deficits. The deficit resulting from under collection can be attributed to tax evasions and millions lost through illicit financial flows. Recently, the world has been awash with information about the scandalous Paradise, Panama and Pandora Papers leaks. You will find that most of the names mentioned in these leaked documents, which are often implicated in tax avoidance and tax abuse and violation, are men. It is also a fact that major multinational corporations that are repatriating large sums of money abroad and are enjoying significant tax breaks are led and owned by men. Curbing these illicit financial flows is urgent and extremely important if we want tax reforms that promote gender equality.
These are not the only recommendations for a just tax structure that also promotes gender equality. Tax policy can make an essential contribution towards the feminist legal agenda and advocacy work. However, we need a complete rethink of what fair taxation policies should look like for greater rights and equality for women. This re-think begins with “engendering” the entire Taxation discourse and most importantly analyzing it through a feminist lens.
Ms Farzan Ibrahim is a Kenyan youth passionate about Economic Development & Policy.