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UNRISD Podcast: Looking for Gender Equity in Taxation

12 Jun 2009

12 June 2009 – In this episode, an UNRISD researcher collaborates with researchers in eight other countries to examine taxation policies for potential gender biases.

Please use the link to the right of this page to access the podcast. (6mins 15secs, MP3 file, 3.57mb)

Transcript of the podcast:

Erika Anderson: You’re listening to the UNRISD podcast, and my name is Erika Anderson. Today’s episode examines how taxation has the power to reinforce or address gender inequality.

The issue of gender equality doesn’t automatically bring taxation to mind. But a forthcoming book co-written by Imraan Valodia, Senior Research Fellow at UNRISD and Professor at the University of KwaZulu-Natal in South Africa, and Caron Grown at the American University in Washington D.C., might change that.

For two years, twenty-four researchers in eight countries examined direct and indirect taxes to determine whether gender bias played a role. As they poured over the numbers, they kept their eyes peeled for any gender bias, explicit or implicit, and thought of ways in which the tax system could be made more equitable. Valodia explains:

Imraan Valodia: When we think about explicit biases in the tax system, we really think about instances when the tax system’s intentionally trying to treat males and females in a way that is not the same.

Erika Anderson: For example, in both Argentina and Morocco, when two members of a household jointly own an asset which earns an income, such as rental property, the tax system assumes the asset belongs to the man of the household.

Imraan Valodia: It’s a view of the household where men are deemed to be the powerful in the household and their partners are deemed to be secondary in the claim that they have on that income

Erika Anderson: As all countries participating in the study have signed the Convention on the Elimination of all forms of Discrimination Against Women, Valodia says explicit biases such as these are in need of reform.

Imraan Valodia: If we think about the whole question of personal income taxes, we found some amount of what we called explicit bias and that’s clearly something that has to be dealt with.

Erika Anderson: Implicit biases, on the other hand, are generally less apparent.

Imraan Valodia: It’s not that the tax system’s really intentionally trying to treat males and females in a way that is not the same but society’s behaving a certain way and the tax system interacts with that and that’s why you have the bias.

Erika Anderson: For instance, in the case of indirect taxes, implicit biases sometimes appear as a consequence of value added tax or VAT, which is a tax on consumption.

Imraan Valodia: If you think about a household, I think we might generally say that females tend to spend more of the income that they earn on things like childcare, on food, on the basic consumption goods and if the VAT system tends to tax those goods, then the outcome of that would be that female members of the household are the ones paying a much higher tax.

Erika Anderson: A way to address this is to zero rate, to essentially remove the VAT from those basic goods. For example, in 1995 South Africa zero-rated paraffin, a fuel used for cooking in poor households. With that change, instead of paying some of their meager salaries on the VAT, the poor were able to keep that money, and what’s more, the government lost relatively little revenue. It was so successful that careful zero rating of some basic consumption is one of the book’s policy recommendations.

Imraan Valodia: Of course you know it need not necessarily mean you can do it elsewhere, you would have to think about what the local context is, but I think broadly we’d like to think there is scope for some goods to be zero-rated.

Erika Anderson: As for other conclusions, though the tax systems weren’t picture perfect, they were better than the researchers had assumed.

Imraan Valodia: In some ways that’s the good news of the project; the results suggest that in most of the 8 countries that we’ve done the research in, the gender impacts of the indirect taxes are not as bad as one might have thought them to be.

Erika Anderson: Though researchers worked with financial institutions such as the International Monetary Fund, the World Bank, and national finance ministries, from the initiation of the project, Valodia concedes that reforming the tax code might not be the most effective way to affect gender inequality.

Imraan Valodia: I think our view generally would be that there’s limits to the degree to which you can use the tax system to change social behavior so the tax system might not be the best instrument to use for gender equity.

Erika Anderson: Instead, Valodia believes governments can transform gender biases more directly by adjusting the way they spend their money, such as focusing on social services. Still, it’s important to eliminate bias wherever it’s found.

Imraan Valodia: But having said that, there is something that you can do with the tax system and I think the results that we have show that it’s not something that you should ignore completely.

Erika Anderson: Or that you shouldn’t ignore at all. In order to give gender equity in taxation the attention it deserves, the goal is to make the results as accessible as possible, both for policy makers and for gender activists.

Imraan Valodia: The key thing would be how social actors use the research and we know that there are strong gender groups that would use this both at the country level but also at the international level to really engage in a much broader discussion about the role of the tax system and what the gender biases need.

Erika Anderson: Valodia envisions several ways the project could develop further—either by looking at how tax issues play out inside the household, or by examining how gender bias affects state expenditures. In the meantime, watch for a book on Taxation and Gender Equity published by Routledge by the end of the year.

For more information, go to our website, www.unrisd.org If you have any suggestions for future podcasts, email us at press@unrisd.org. Thank you for listening.

For UNRISD news, this is Erika Anderson, in Geneva.