A gendered approach to taxation: Improving the equitability and efficiency of DRM

ATAF-ATI side event at the 7th ATAF General Assembly

On 31 October 2022, at the 7th African Tax Administration Forum (ATAF) General Assembly in Lagos, ATAF and the Addis Tax Initiative (ATI) hosted a side event on a gendered approach to taxation. The event is part of ATI's commitment to foster domestic revenue mobilisation (DRM) and raise awareness on the need to spotlight the link between gender and tax policy.

On behalf of the ATI, Ms Jeneba BANGURA, Deputy Commissioner of Sierra Leone’s National Revenue Authority and ATI’s Co-chair, kicked off the event wishing all participants an enriching experience while outlining ATI's future work in promoting tax policies that help close gender gaps and contribute to social and economic development in ATI partner countries. Ms BANGURA highlighted that the promotion of gender responsive action in policymaking is one of the ATI partnership principles, transversal to all four commitments of the ATI 2025 Declaration.

Ms Mary BAINE, ATAF's Deputy Executive Secretary and Head of Member Services and Domestic Resource Mobilisation at ATAF, continued the discussion with a warm welcome to the panellists and attendees, calling attention to the challenging and timely discussion on gender and taxation. The event revolved around three interlinked sessions where the main challenges surrounding gender and taxation awoke provocative interventions from a receptive audience.

The first session brought the audience onboard asserting that gender biases in tax systems typically come in the form of implicit biases, which arise “when, due to the gendered patterns of social arrangement, gender pay gaps, and economic behaviour, the outcome of tax policy or administration has different implications for men and women”, than explicit ones. For Ms Varsha SINGH, Board Member of ATAF Women in Tax Network (AWITN) and ATAF’s Head of Strategy, Planning, and International Cooperation, the results from the AWITN study Are Tax Policies Developed to Reduce Gender Inequality in ATAF member countries?call to reconsider the role of tax systems in perpetuating inequality, especially, in countries where women mainly work in the informal sector and have lower participation in the formal labour market. The conversation turned towards the need to consider gender inequality in access to education and the labour market when defining personal income tax (PIT), corporate income tax (CIT), and value-added tax (VAT) headline rates. Ms SINGH further highlighted the need to encourage the collection of gender-disaggregated data for a deeper understanding of the dimensions of these biases.

Creating awareness on gender-sensitive approaches in tax systems requires, among others, developing tools for countries to assess their current stand as well as to take steps to improve existing gender biases. Ms Berni SMITH, Gender and Tax Lead at the UK Foreign, Commonwealth, and Development Department (FCDO), called attention to the economic boost that comes with the realisation of the 5th Sustainable Development Goal (SDG) – Gender equality. Ms SMITH summarised the road to gender-sensitive tax systems in three interlinked processes and ambitions. Tax systems must look at existing explicit and implicit biases and directly remove the explicit biases, while gradually working to address indirect discrimination. The fight against implicit biases can be achieved by eliminating economic and societal barriers faced by women in education, labour market, tax compliance and enforcement, etc. Countries aspiring to reach to the most ambitious level of gender-sensitivity should generally, look at reform needs in both tax policy and revenue administration and make sure to adequately involve women in all processes. The FCDO’s Tax and Gender Guide for Tax Programming which "enables the consideration of gender issues in the design and delivery of tax programs" was said to provide relevant support for countries.

The event's second session, moderated by Ms SINGH, consisted of a panel discussion around biases in tax systems and women's participation in the labour market. Ms Emily MUYAA, the Financing for Sustainable Development Office of the United Nations Department of Economic and Social Affairs (UNDESA), shed light on how tax benefits that disproportionally favour men result in the erosion of public revenue which could benefit women, children, and the elderly. Rigid tax collection schemes, such as the joint filing of PITs, were said to perpetuate household disparities, while taxing items which are exclusively used by women, e.g., VAT on sanitary products, could be considered as a form of explicit bias in tax systems. Ms Veronique HERMINIE, Commissioner General of Seychelles' Revenue Commission and Board Member of AWITN, demonstrated how tax and labour policies could account for a country's social context to have a positive gender outcome. In Seychelles, 60% of households have women as their head and women are more likely to work in the formal sector. The Seychelles Revenue Commission took note of this context and designed the PIT thresholds in a way that benefit the female population, while attempting to close the childcare gap.

The discussion on the experiences of Ghana and Nigeria brought additional perspectives on the topic. Ms Nana MENSAH, Ghana Revenue Authority, discussed as to how some COVID-19 pandemic relief measures brought gender favourable outcomes. For example, during the pandemic, the government of Ghana suspended PIT collection, thereby benefiting small business owners which largely consist of women. In Nigeria, the need to advance tax policy reform in the same pace as the evolution of Nigerian households was highlighted as a crucial pillar for the overall wellbeing of the society. Ms Ehile AIBANGBEE, Board Member of the Federal Inland Revenue Services (FIRS), highlighted the role of tax policy in improving gender equality and expanding women’s fundamental rights, including property ownership. Ms AIBANGBEE further encouraged women's active participation in the formal economic sector as a necessary step to achieve their economic empowerment.

At the conclusion of the panel session, Ms SINGH directed the dialogue towards the need to increasing the number of women in leadership positions and its positive representation effect. Mentorship was outlined not only as one fundamental path through which we could bringing more women into the tax and development sector, but also to make workplaces more gender sensitive. The guidance which young women receive through mentorship, it was noted, could come from senior professionals of both genders. Male mentors, for example, were determinant for Ms HERMINIE’s career advancement. Emphasising on the role of mentorship in her professional life, Ms MENSAH also touched upon the recently launched pilot mentorship program of AWITN and it expected positive impact on tax professionals across Africa.

The third session of the side event hosted a discussion on the opportunities and challenges of collecting and using gender-disaggregated data in policymaking. Moderated by Ms BANGUARA, the session contained three presentations. Ms Sarah PERRET, Unit Head of the OECD's Tax Policy and Statistics Division, asserted that gender equality should form a core part of inclusive and equitable tax policy design. In her presentation, Ms PERRET discussed the results of two recent OECD studies on the topic of tax and gender – Tax Policy and Gender Equality: A Stocktake of Country Approaches and Taxation of Part-Time Work in OECD. The results of the reports showed, Ms PERRET iterated, the urgent need to close data gaps by improving the collection of gender-disaggregated tax data and analysing labour markets, consumption trends, and property and wealth ownership. In most OECD countries, for instance, women, as second earners and part-time workers, face differentiated marginal tax rates and lower hourly wages.

Supplementing Ms PERRET’s view, Mr Alexander KLEMM, Chief of the Tax Policy Division, Fiscal Affairs Department at the International Monetary Fund (IMF), underlined implicit biases linked to lower average income of women as common, especially, when considering household taxation. He further pointed to flat (low) capital income tax rate as another common implicit gender bias as capital ownership is men dominated. The spotlight session concluded with the presentation of the 2021 African Tax Outlook (ATO) which was given by Ms Susan NAKATO, Manager of ATAF's Strategy, Planning, and Management Information Reporting. Using data from the ATAF Databank, Ms NAKATO showed that, in 2021, women occupied only 27% of executive positions in African tax administrations. Ms NAKATO announced that the ATO will include gender-disaggregated data for all tax administration staff from 2023 onwards.

The event’s closing remarks by Ms Chenai MUKUMBA, AWITN’s Vice-chair and Policy Research and Advocacy Manager for Tax Justice Network Africa (TJNA), welcomed the debate on implicit biases in tax systems, the relevance of existing efforts to collect better data for effective policy development, and the relevance of country-peer learning on the gender and tax policy dimension. Ms MUKUMBA called attention to take stock on the discussion surrounding the impact of tax codes on women’s participation in the labour market and pointed to potential of tax codes to ameliorate gender gaps in employment participation. In wrapping up the discussion, Ms BANGURA stated that the side event serves as a kick start to a gender-responsive tax policy work and engagement of the ATI  and its members. Ms BANGURA further mentioned that ATI and ATAF would publish a joint paper on gender and tax policy to continue the dialogue in the ATI consultative groups.

The discussion at the side event demonstrated that gender-sensitive and gender-transformative tax policy can boost economic growth and widen the tax base, while improving the fairness and equitability of tax systems. These gender-transformative measures must also seek to support social programmes which provide targeted benefit to the vulnerable segments of society. The role of gathering gender-disaggregated data was emphasised as a critical step for informed policymaking and in bringing policymakers onboard.

Find the ATAF-ATI joint outcome statement here, while the presentations featured at the event can be access here.

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