Making Tax Systems Work for Women’s Rights

Thursday, June 21, 2018 - 10:29

We all agree: we must advance women’s rights. But how do we make sure we have money to make it happen?

Tax is central to the delivery of women’s rights all around the world. It is high time to recognise it and make sure that national and international tax rules work for women’s rights – and that this topic becomes a central part of European development policy debates.

This year’s European Development Days, which took place at the beginning of this month in Brussels, brought together over a thousand organisations and inspiring initiatives advancing women’s rights all around the world. We loved seeing the diversity and innovation among them.

What was less present were discussions about how to sustainably finance it all. A few sessions focused on the crucial topic of gender budgeting, discussing how to make sure that the allocation of public funds is distributed fairly and will reduce gender inequalities. Few discussions, however, covered the issue of how to raise this revenue - and how the way in which public resources are mobilised affects women. In other words: gender-sensitive taxation.

Surprisingly, yet again, tax – the most sustainable, reliable and democratic way of funding development and human rights - was rarely mentioned at the EDDs despite being an absolutely crucial topic in this context. How tax is raised and spent is central to women’s rights, and arguably more important to women than men. Women tend to depend more on public services, due to their reproductive health needs and unequal distribution of unpaid care work. Governments also need to provide services that prevent and respond to the high levels of violence that women face in both domestic and public spheres. This is why the amount of public revenue available for public services matters so much and why issues such as tax dodging by companies and individuals are crucial to the fight for women’s rights.

But how this revenue is raised matters too. While explicit gender bias is uncommon in tax policies, most countries’ tax systems contain implicit biases. Differences between men’s and women’s employment, income and spending patterns as well as asset and land ownership mean that different types of taxes affect the sexes differently. Consumption taxes (such as value-added tax [VAT]) are often regressive and have an implicit gender bias that works against women. Because women are over-represented among the poor and often spend a higher proportion of their income on goods and services (which are subject to VAT) for their families, this means women will likely pay a higher proportion of their income in consumption tax than men. While because men are over-represented among the rich and owners of assets and land, personal income tax and property taxes would usually affect them more, but these progressive taxes sometimes do not exist and in the case of personal income tax there can be significant tax gaps (where taxpayers either evade or avoid their taxes).

These are just some of the considerations ActionAid discusses in the ‘Making tax work for women’s rights’ report – and that we further explored in our panel debate at this year’s EDDs under the same title. We will continue our work in this area – firstly with a new report, to be published soon, including recommendations for how the IMF could improve its advice around gender-responsive fiscal policies. Secondly, we hope to discuss how EU development policies are going to include tax and women’s rights over the coming year as well as hear more talk about tax at the next EDDs.