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This analysis explores the intersection of gender and fiscal policies, assessing how taxation structures impact women's economic participation and household dynamics. It highlights the implications of joint and individual taxation, showcasing examples from various countries where tax reforms have aimed to reduce gender bias. The relationship between commodity taxes and women's economic burden is scrutinized, revealing how VAT and indirect taxes disproportionately affect low-income women. The discussion emphasizes the need for gender-sensitive fiscal policies to foster inclusive development and equal opportunities in the labor market.
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Gender & Fiscal Policies RituDewan Department of Economics University of Mumbai
Contextualising Issues • Inclusive Growth v/s Inclusive Development • Revenue & Fiscal Deficits • Tax : GDP Ratio (wealth; capital gains; financial transactions, etc) • Commodity Fetishism • Unit of analysis; motive for production • Patriarchy as Macroeconomic Construct
Direct Taxes: Income Tax & Women’s Labour Joint Taxation: greater the difference between spouses’ incomes, higher her earned income is taxed; deterrent to participation in ‘gainful’ employment; fall in woman’s labour supply. Individual Taxation: economic gain of working is dependent upon her earnings & not her location in the patriarchal structure.
Gender Bias in PIT • France (1983): woman as independent tax-payer • Netherlands (1984): repeal of higher basic tax allowance given to married men • U.K. (1990); Ireland (1993): repeal of Compulsory Joint Tax filed only in husband’s name • South Africa (1995): single Income Tax rate irrespective of gender & marital status • -------Married Person • -------Unmarried Person • -------Married Woman • India: Hindu Undivided Family
Direct Taxes: Stamp Duty Delhi: 6 % vs 4 % (1% discount for Joint Registration) Haryana: 6 % vs 4 % Madhya Pradesh: 8 % vs 6 % Uttar Pradesh: 5 % vs 4 % Punjab (urban) : 8 % vs 7 %
Indirect Taxation: VAT… • Success only where Tax : GDP ratio is high, & where dependence on international trade is low • Inflationary • Anti Labour-intensive industries, as ratio of selling price is higher compared to capital-intensive; surplus labour economies • Impact on informal economy
…Commodity Taxes: VAT… • Commodity taxes alter relative prices of taxed & untaxed goods, and hence transform individual & household decisions about consumption, production & investment. • VAT esp has a greater anti-women & anti-poor impact, given the fact that these sections typically spend a larger proportion of their income on basic consumption goods; low earners therefore pay a higher average tax rate.
…Commodity Taxes: VAT… Gender biases in all consumption taxes manifest in 1. choice of commodities & services covered 2. consumption & maintenance patterns of men & women. Egs: • VAT on processed wheat directly impacts women, the bias thus not being ‘implicit’. Women, as ‘carers’, now buy grains, and increase time spent on ‘unproductive’ activity. • Reduced subsidies on cooking gas & kerosene directly affect health & time use pattern; women thus pay ‘hidden’ tax to the economy as a direct result of change in macroeconomic policies.
Other Illustrations • Pension Policies • Regularisation of Medical Insurance • Child-Care exemptions • Female-headed Households
14th Finance Commission • “levels of subsidies required”; “pricing of public utilities”: cooking gas, water, sanitation • Subsidies v/s Exemptions • Conditionalities of transfer of resources to states: child sex ratio • WAI: Basis of devolution of funds (Well-being Attainment Index) • Political Federalism v/s Economic Federalism
Fiscal Strategies & Work Burden 1. ‘Work’: Paid & Unpaid (income-earning; income-saving; income augmenting) 2. ‘House’ work 3. ‘Fiscal-Work’: reduced subsidies & increased taxes 4. State schemes Financial & Fiscal Strategies as Gendered Equalisers
