How to Advocate for Gender Equity through Taxation?
Taxation is gendered and can reproduce or sometimes exacerbate gender inequalities. As demand for increased domestic resource mobilization grows, gender-based organizations need to expose the implicit and explicit gender biases of tax policies and advocate for their removal. This Tax Advocacy Tool Kit from Tax Justice Network-Africa will equip you to do just that. A summary prepared by AWID staff of the issues raised in the economic toolbox session “How to Advocate for Gender Equity through Taxation?” at the 2012 AWID Forum is included below.
Speakers: Sandra Kidwingira and Ernest Okyere (Tax Justice Network-Africa)
How to Advocate for Gender Equity through Taxation
References: Why Africa should stand up for Tax Justice, Building Democracy in Africa through taxation. Nairobi Declaration on Taxation and Development, Taxation and Gender Equality: A comparative – Karen Brown and Imran.
1. Tax can be defined as a fee that is levied by a government on a transaction, product or activity in order to finance governance expenditure. The rates are the basis of taxation and the range of transactions, items and activities to be taxed, are decided upon by a legislative body.
2. There are four main principles that form the framework of taxation, known as the four Rs of taxation and they define the purpose of taxation as follows:
- Raise revenue, which should be done equitably.
- Redistribute income and wealth in order to address poverty and inequality.
- Re-price goods and services to promote activities that are better for the welfare of society, especially in the context of health and climate problems (Activities that are harmful are priced higher to discourage them.)
- Representation of tax payers as citizens, as they pay taxes.
3. Public revenues generated through consensual taxation lead to the burgeoning of the state society and in theory, represent a fiscal social contract with mutual benefit for governments and citizens.
- For citizens, taxes lead to better delivery of public services, citizen participation in decisions of how taxes are spent and accountability.
- Conversely, for governments, taxation offers an opportunity to provide representation, incentives for accountability to generate more revenue, incentives to foster well being, quality of life and prosperity for citizens and in general help to build effective states.
4. Tax systems are not gender neutral as their policies can be used to ameliorate or exacerbate gender inequalities.
- Explicit biases in tax regulations and provisions include those that treat men and women differently such as joint property being filed under the husband’s tax return, which denies women the right to own property.
- Implicit biases in tax regulations and provisions are systemic and based on socially constructed customs and arrangements such as favouring formal employment, which is more common for men.
5. In practice, policies and procedures in taxation can be a threat to political progress, sustainable economic development and poverty eradication, which have greater impacts on women’s rights on a global level, due to the higher tendency of women to face poverty.
6. On a domestic level, the following tax related issues can arise as threats to equitable development:
- Tax exemptions for foreign direct investment, leading to revenue loss
- Complexity of tax codes which citizens cannot understand, resulting in them not paying tax.
- Lack of tax compliance by citizens due to poor provision of goods and services for their money, as well as lack of general good governance and opacity in government spending.
7. On an international level, the following tax related issues can arise as threats to sustainable development:
- Revenue leakages due to tax avoidance (taking advantage of loopholes in tax laws) and tax evasion (illegal withholding of tax.)
- Lack of transparency of operations by multinationals
- Harmful tax competition (amongst developing countries)
- Tax havens (financial secrecy jurisdictions to encourage international investment)
8. Many developing countries utilize the incentive of tax havens to encourage business by multinationals with particularly harmful impacts on natural resources, especially within extraction industries.
- The Campaign against Tax Havens http://www.endtaxhavensecrecy.org/ is a coalition of organisations from around the world raising awareness and advocating for more transparency in multinational’s balance sheets.
9. The Dodd Frank law in the US stipulates that multinationals listed on the NY Stock Exchange have to declare information on the number of employees, profit and taxes on a country-by-country basis. This is a step in the right direction for increased transparency and serves as a model for further action in other countries.
10. Tax justice is a powerful and important crosscutting advocacy tool to reduce poverty, improve social welfare, resulting in a greater impact on women and especially poor women. A toolkit has been developed to support this work.
Some examples of tax justice strategies to support women’s rights organizations working on other issues include:
- Analysis of taxed income with a focus on gender inequalities among the poor
- Advocacy for increased transparency in tax collection
- Advocacy for increased transparency in government spending
- Research on tax administration efficiency
- Advocacy taking into consideration gender differences in consumption, recognizing that women tend to spend more on food, health and education
- Advocacy for women’s rights in property ownership.