New study by ATAF tackles gender inequality in Africa’s tax sector

PRETORIA - Gender equality is equality between men and women in relation to economic and social factors under law, opportunity, and voice. It encompasses fairness, the same access to information services, resources, benefits, and the ability to influence and contribute to policy-making. The persistence of gender inequality that has caused the stagnation of social progress makes it critical for ATAF member countries to address the social, cultural, and economic patterns of men and women as they seek to move towards Sustainable Development Goal 5 (SDG5). 

A study titled Are Tax Policies developed to reduce gender inequality in ATAF Member countries, recently published by ATAF has found that legislated tax regimes which, to a large extent, determine a country’s developmental trajectory, tend to have inherent gender biases that particularly discriminate against women. These gender biases are either explicit referring to gender bias that refers to specific provisions in tax policies that treat men differently from women - or implicit gender bias which refers to provisions in tax policies that, much as they don’t clearly spell out different treatment between men and women, they impact social, cultural and economic factors that affect men and women differently. 

The study forms part of the activities undertaken by the overall picture painted by the ATAF Women in Tax Network (ATWIN), a programme launched by the Pan-African tax organisation to create a platform for collaboration and empowerment for women working in the tax sector and raise awareness on the interconnectivity between tax policy and gender equality. The picture painted by this desk review reveals that the current state of tax policies in ATAF countries yields little evidence that they were developed with any concern for their impact on inequality between the sexes. It specifically points to the following six features that have a negative effect on women and the low-income earners in the 16 sampled ATAF countries (Angola, Cameroon, Cote d’Ivoire, Egypt, Ghana, Kenya, Morocco, Mozambique, Nigeria, Seychelles, Sierra Leone, South Africa, Tanzania, Togo, Uganda and Zambia).

1. The high PIT threshold which is above the poverty line

2. The high headline PIT rates 

3. The low CIT headline rates 

4. The high presumptive Turnover tax thresholds

5. The revenue dependency on VAT 

6. The High Standard VAT Rates

The African Tax Administration Forum (ATAF) recognises the importance of tax gender parity and seeks to determine the extent of such parity amongst its members. Of the 16 ATAF member countries which participated in this study, none have legislation with provisions for tax-related gender parity. Two are moving towards tax parity, whilst the remaining 14 are yet to initiate action in this regard. The proposed policy and administration recommendations proposed by the study promoting the development of tax policies conducive to gender equality include:

• the need for an ATAF commitment to gender equality; 

• the requirement that all tax thresholds should be above the international poverty line; 

• a review of headline CIT rates (in opposition to the OECD recommendation of a minimum CIT rate). 

Speaking at the launch event held on 1st August 2022 as part of the official launch of Women’s month at ATAF, the Commissioner General of Seychelles Revenue Commission, Mrs Veronique Herminie, raised the “importance for ATAF countries to give serious consideration to gender-sensitive tax policies, as they have the potential to contribute to widening the tax base, improving tax efficiency, meeting cardinal tax principles and responding to the objectives of the AWITN and SGD 5”. 

The above sentiment was shared by fellow Board Member of AWITN and ATAF’s Head of Strategy, Planning and International Cooperation, Mrs Varsha Singh, who called upon Member countries to:

• widen the tax base, improve tax efficiency, and meet the cardinal principles of taxation;

• respond to the objectives of ATWIN and to those of Sustainable Development Goal 5 (SDG5).

Policy makers in ATAF countries need to work together on developing frameworks to shape tax policies that address gender issues peculiar to Africa”. .“ Such policies will enable the mobilisation of much-needed revenue to support social programmes that ease the strain of unpaid work and increase gender-sensitive economic benefits”, she added.

A panel discussion featuring Mrs Singh and Mrs Herminie, alongside the Chairperson of the Africa Industry Tax Association and Board member of AWITN, Mrs Lazelle Terblanche and Mrs Susan Nakato, the Lead researcher for the study, was held on 1st August 2022, virtually. 

The paper Are Tax Policies developed to reduce gender inequality in ATAF Member countries is now available for download on ATAF’s website.