Secretary General of the All-Africa Students Union, Peter Kwasi Kodjie, has charged African governments to formulate progressive policies aimed at reducing the tax burdens on women.
In an article for NORRAG Special Issue 5 titled, “Understanding the Gender Dimension of Tax and Education”, Kodjie stated that even though the provision of public infrastructure and social services by governments is a key factor for socio-economic development, tax systems ought to reflect the uneven burdens between men and women.
Expressing concerns over the inequity of VAT laws in Africa, he said, “VAT is often regressive because it applies equally to everyone, regardless of income. Women tend to earn less than men, so a tax that treats everyone the same will mean women are paying more as a share of their income than men. Moreover, because women tend to spend more than men on buying basic necessities such as food, clothes, school items and medicines, women can be actively disadvantaged by the widespread use of VAT”.
According to the General Secretary, if policies are gender unbiased, it will aid in achieving equitable national development.
He indicated that tax systems in developing countries are made up of different categories of taxes. In Ghana for instance, the tax system is made up of three main categories which include direct taxes such as income taxes (personal and corporate), trade taxes (import and export duties) and indirect taxes (Value Added Tax, National Health Insurance Levy, Ghana Education Trust Fund Levy); which are rarely examined through the gender lens.
In the article, Kodjie lamented over how women are often doubly disadvantaged regarding how taxes are raised and how they are spent.
In terms of direct taxes, the Secretary- General of AASU averred that personal income tax is a major source of revenue in richer countries but less so in developing, therefore, direct taxes should be introduced in a progressive way, so high earners will pay a higher rate and lowest earners exempted.
He emphasized that, “this can be progressive and gender-just – but most personal income tax systems in Africa are very flat, in part because those with higher incomes tend to have louder voices in decision making affecting tax policies”.
Kodjie made references to ActionAid, a global federation working for a world free from poverty and injustice, and the International Labour Organization to press home his assertions. According to ActionAid, if the focus of raising revenues move towards introducing progressive income tax, with those earning more paying more, that would be much fairer for women as men would pay more which is not the norm in most present tax systems.
A 2015 report by the International Labour Organization, (ILO) also detailed that, tax relief policies are often introduced to personal income taxes which further benefit men who are concentrated in formal employment.
“There are similar challenges with other forms of direct tax, such as Corporate Income Taxes. When women are business owners they tend to be concentrated in small and microbusinesses: only 5 per cent or less of Chief Executive Officers (CEOs) of the largest global corporations are women, yet tax systems often target small business owners more than large corporations”, the report said.
The report indicated that, informal employment is a larger source of employment for women than for men.
It went on to state that, out of the total population of employed women in Sub-Saharan Africa, 84% are informally employed with the remaining 16% working in the formal sector, compared to 63% of the men in the informal sector and 27% of men in the formal sector.
Though women tend to concentrate on street vending, home-based work and as industrial outsourcers which is all part of informal sector jobs, these might largely be thought to be tax-exempted jobs as they will not be paying formal business rates or income tax.
However, recent research suggests informal workers and businesses are often taxed quite heavily through numerous types of fees, charges and licensing costs, which may be levied locally, nationally or both with informal market traders often being charged multiple times, whether formally or informally according to a report by ActionAid.
The Secretary-General indicated that, in Ghana, 80% of women work in the informal sector, compared to 50% of men. A 2011 study found that 95% of informal women traders paid some kind of tax, whether national tax or local taxes including market fees. Half of these women paid both national and local taxes, and a higher proportion of taxes were paid by those earning relatively less.
Kodjie is therefore asking stakeholders to put measures in place to address these loopholes to alleviate the plight of women who play crucial roles in the socio-economic development of societies.
NORRAG is a global network of 5,000 members for international policies and cooperation in education and training. NORRAG is an offshoot of the Research, Review, and Advisory Group (RRAG) established in 1976 and at the time funded by the International Development Research Centre (IDRC) and Swedish International Development Authority (Sida). The NORRAG Special Edition (NSI) includes a number of concise articles from diverse perspective and actors with the aim to bridge the gap between theory and practice as well as advocacy and policy in international education development. You can download the fifth edition here: https://www.norrag.org/nsi-05-domestic-financing-tax-and-education/