Tax Policy and Gender Equality

4. Conclusions and implications

The impact of taxation on gender outcomes is widely considered to be important across the countries surveyed. Three-quarters of the 43 countries who responded consider tax & gender to be at least somewhat important (Figure 3.1), with eight of these countries considering it to be very important. Twenty-two countries indicated that they have implemented specific tax reforms to improve gender equity. These measures have typically been implemented in the personal income tax system, either via changes to the unit of taxation or administration or the inclusion of credits or allowances, although several countries have also introduced zero or reduced VAT rates for sanitary products with the goal of improving the gender impacts of the tax system.

Few countries noted examples of explicit bias in their tax system, either now or on a historic basis, also most commonly in the personal income tax system. The differences in the taxation of men and women that were noted more commonly provided a tax benefit to women rather than men; for example, in Hungary, a tax allowance is targeted at mothers of more than four children; whereas in Israel, extra tax credit points are available to mothers.

More than half of the countries surveyed (23 countries) indicated that there was a risk of implicit bias in their tax systems, although only 16 countries reported having assessed this. The implicit biases noted by countries were seen to arise from five common gender differences between men and women (Box 1): differences in the level of income between men and women; differences in the nature of income between men and women; the taxpayer unit used in personal income taxation; differences in consumption patterns; and differences in expectations regarding social roles.

As with explicit biases, these implicit biases can occur to the detriment of either gender, depending on how the tax system interacts with these underlying characteristics. For example, the progressivity of the tax system provides a lower tax burden for lower income earners – typically women – while at the same time, producing disincentives in household-based tax systems for second earners to work.

Within both of the explicit and implicit gender bias categories, countries noted examples that either reduced gender bias, or increased it. Based on these different examples, a further disaggregation of the implicit and explicit framework could be considered, as set out in Table 4.1.

Nineteen countries reported using gender budgeting in their country, with five of these countries noting that the gender budgeting framework included specific considerations for tax purposes. Two countries are considering introducing a gender budgeting framework in the near future. Of the countries currently using gender budgeting, the most common basis for this is a high-level political appointment, followed by a specific legislative provision via budget or other law. Three countries reported that this was a constitutional requirement.

Table 4.1. An expanded typology of explicit and implicit bias

	Explicit	Implicit
Exacerbate gender bias	Provisions in the tax code, or in formal administration requirements, that explicitly reference gender, and which worsen gender biases present in society. E.g. lower tax rates for married men; tax credits available for men; women not having access to their tax info. Policy response: Remove.	Tax settings that are gender neutral, but which interact with the different economic and social realities of men and women in ways that worsen gender biases present in society. E.g. higher tax rates on second earners, informal taxation or user fees on services used more by women, low rates of taxation on capital income or wealth. Policy response: Reconsider.
Reduce gender bias	Provisions in the tax code, or in formal administration requirements, that explicitly reference gender, but which reduce gender biases present in society. E.g. lower property tax or inheritance rates for women, tax credits for working mothers. Policy response: Evaluate.	Tax settings that are gender neutral, and which interact with the different economic and social realities of men and women in ways that reduce gender biases present in society. E.g. Improving progressivity of the tax system, reducing disincentives for low income earners to work, broadening tax bases to include capital income. Policy response: Promote.

Source. OECD.

Few countries systematically analyse the impact of tax administration or compliance on gender. The overwhelming majority of countries indicated that they have not designed or implemented analyses on the gender impact of tax administration and compliance measures, nor adjusted their tax administration processes.

Most countries have access to some gender-differentiated data for policy analysis, with 25 of the 43 respondents indicating this. Access to data is concentrated on male and female incomes and the labour market: detailed micro-data on male and female incomes is available in 24 of the 43 countries surveyed and 17 have access to information on male and female labour force participation. Detailed data on consumption (seven countries) and on property and wealth ownership (ten countries) disaggregated by gender is less commonly available.

Finally, countries indicated a number of priorities for future work. The most common preference was for future OECD work to consider the impact of tax credit or tax allowance provisions on gender equity. A secondary priority was the design of explicit tax biases designed to reduce gender inequalities (Figure 3.10). There was also a strong desire for further work to focus on other labour tax issues, with the impact of taxes on second earners, the progressivity of PIT systems, and the impact of tax credits and allowances on gender, among the top four options for future work. A third priority for future work indicated by countries was exploring gender bias in the taxation of capital income and capital (e.g. wealth and inheritance taxes).

Responses to the survey highlight varying degrees of priority and assessment of gender outcomes in tax policy design across the countries surveyed. Key areas where implicit biases were seen to exist in many countries include differences in the nature and level of income, consumption decisions, and the impact of social roles on the outcomes of the tax system. Further analysis could be pursued to improve the awareness of gender biases in country tax systems, in particular implicit ones, with a view to better assess their impact and reduce them as needed. While many countries indicated that gender is taken into account in their tax policy process, this is not a formal requirement in many countries and guidance is rare. A useful step for governments wishing to further address the impact of implicit bias in their tax systems could be to consider guidance on how to take gender into account in tax policy design, as well as for tax administration purposes. Consideration of the impact of changes in the tax structure and mix are also important to assess for their impact on gender outcomes. When available, gender-disaggregated data is useful to understand possible biases and gender-specific patterns. The survey has also highlighted the need to improve data collection on men and women’s property and capital ownership, in order to facilitate deeper analysis of these issues, which is one of the priorities for future work.