Tax injustice has the face of a woman
The women’s organizations in the developing world can be proud of themselves. Thanks to their struggles, there has been significant progress in adopting legal frameworks improving gender equality. These days, women have greater access to their own income, there has been an increase in their labour participation and the gaps in quality of employment between men and women are closing.
Nevertheless, there is much to be done. There is still a pay gap between men and women doing work of equal value, with women concentrated in informal jobs and jobs without decent working conditions. UN Women affirms that 75 per cent of women’s work in Asia and Africa is in the informal sector without access to a living wage, maternity or paid leave, or pensions.
Moreover, women still carry a disproportionate responsibility when it comes to housework and unpaid care. Looking after dependent family members, cleaning and cooking are still ‘women’s affairs’, which limits their opportunities for education, training and work, as well as makes their economic empowerment impossible.
Today, we are at a crossroads. The renewed commitment to gender equality and human rights through the 2030 Agenda for Sustainable Development clashes with a less favourable economic environment. Governments are implementing austerity policies with devastating consequences for unprotected populations. At the same time, the general public can see that many multinationals only pay a part of the taxes they owe, as revealed again by the Paradise Papers scandal.
What the average citizen finds most surprising is learning that these tax abuses are legal. The current regulations allow companies to declare their profits, not in the countries where they are made, but in other countries with lower – or even zero – tax rates. This system perpetuates tax competition by pressuring countries into levying increasingly lower taxes.
We, the Independent Commission for the Reform of International Corporate Taxation (ICRICT) believe that making progress in the region’s gender agenda requires a broader perspective. Gender equality cannot be achieved without tax reform for multinationals.
Fiscal policies are not neutral with respect to gender equality; they can promote or impede achieving it. Due to the different and unequal positions men and women hold in the work force, as consumers, as producers, as owners of assets and as those responsible for the activities within the scope of the ‘care economy’, women and men feel the impact of tax policies differently.
When multinationals do not pay the taxes that they owe, this means that States have fewer resources to invest in public services, such as education, health care, childcare services, access to efficient justice systems and access to public drinking water and sanitation systems. This dynamic exacerbates gender equality, because women are overrepresented among the poor and among the demographic group with precarious or low-paid jobs. In addition, they tend to take on a larger share of unpaid care work when social services are cut. Closing a nursery school might force a woman to leave her job to take care of her children.
Furthermore, when countries see their capacities to raise revenue diminished – due to multinationals not paying the right amount the owe – governments tend to compensate for this loss by increasing the tax burden on small and medium-sized business or on citizens and families (generally by increasing sales taxes, e.g. value-added tax – VAT). These measures also have a gender dimension, as women are overrepresented in small and medium-sized business (which have fewer possibilities to evade taxes) and at the lowest wage levels. The more regressive the tax system, the more disproportionally the burden of sustaining public policies will fall on the shoulders of women.
On 8 March when we celebrate International Women’s Day, when the governments reiterate their commitments to the topic of gender equality and women’s rights, it would not be a bad thing to remind them that we will never be able to make progress in gender equality, nor ensure women’s rights, without progressive tax policies.
By Magdalena Sepúlveda