Every cent lost to tax havens could be used to strengthen our health and social systems
It’s women in the informal sector who are suffering the harshest effects of our broken tax system.
As the coronavirus spreads all over the world like fire, its impact on people with low or nonexistent income is being felt and will soon be severe. While we are reflecting on the consequences of COVID-19 on the world, we must note how they will dig even deeper the poverty hole for those who have limited access to social services/protection and have to earn an income on a daily basis to put food on their table, most of whom are women in the informal sector.
Governments are advising their citizens to stay at home, work from home where it is possible. How much more unpaid work will be taken up by women during these uncertain economic times? This would be a good time for governments to reflect and review their public health and social protection systems.
The health crisis coincided with the global campaign on Tax Justice for Women´s Rights. Organised by the Global Alliance for Tax Justice, together with its regional members and partners, the fourth edition happened from March 8th to 20th under the theme Make Taxes Work for Women.
The annual campaign aims to reinforce the importance of gender-responsive and quality public services that should be ensured by our governments and are essential to realise women’s rights. Our point is: taxes are the most sustainable source of funding for public budgets and a tool to redress many forms of inequalities, and, in order to ensure that our social services will have funding, we need to tackle harmful tax practices including tax avoidance and tax evasion.
The current broken international tax systems allow corporations to dodge taxes, shift income to tax havens and facilitate illicit financial flows (IFFs). Every year, developing countries lose between USD 50 and 100 billions in public revenue due to IFFs.
Because of this, governments are unable to fund public services, social protection and infrastructure to address inequalities. This aggravates poverty and affects poor and marginalized women the most. Every cent lost to tax havens could have been invested in public hospitals, schools, transportation, clean water and sanitation, and in institutions or programs that promote gender equality. The pandemic makes this even more urgent.
This problem is so deep-rooted in our daily lives that many people can’t realise how systemic it is. Have you ever thought about how unpaid care work impacts women? Whenever children, older people, sick people or people with disabilities need support or care because there is no governmental support, women are the ones who take responsibility for this. According to the International Labour Organization (ILO), women perform 76.2% of the unpaid care and domestic work – this alone is valued at nearly $11 trillion a year.
By carrying the burden of unpaid care and domestic work, women support our communities and sustain our countries’ economy, but it has negative consequences on our autonomy. This is why we need to promote the redistribution of this work: it is essential for women to fully enjoy human rights as women.
Africa loses an estimated $50 billion a year to Illicit Financial Flows, a phenomenon which continues to impoverish women and girls who have limited access to education, healthcare, housing, potable water and sanitation, and safety. Africa can simply no longer stay quiet and indifferent to the problem posed by IFFs.
A research paper on the gender dimensions of IFFs by FEMNET gives an example of tax incentives in Sierra Leone, where international companies were granted tax exemptions amounting to 224 million US dollars in 2012, equivalent to 55 percent of government revenues, eight times the health budget, and seven times the education budget.
To make equality a reality to all, we need significant changes in our global financial system. Whenever a country is unable to finance its own development and social spending due to debt repayments, tax incentives, austerity measures and budget deficits, women and girls are the ones who suffer the most. This systemic injustice is what we are denouncing not only in our campaign, but also during the whole year.
While recognizing that there has been some progress in the past years, we took this time dedicated to the global days of action under the theme Make Taxes Work For Women, to review the promises made to women through different platforms and to evaluate the results using real life examples. We used this moment to voice concerns and demands such as stopping illicit financial flows and harmful tax practices, and the removal of gender bias encouraged by discrimination in tax policies and laws such as those tax systems that provide automatic deductions for dependents to men, but women are only able to access such benefits in special circumstances.
According to the FEMNET report, in 2012, 36 per cent of adolescent girls and 31 per cent of adolescent boys in Sub Saharan Africa were out of school. But in some African countries i.e. Angola, Ethiopia Guinea and Mali the difference between the rate for girls and boys was larger than 15 per cent. Girls face the challenge of early marriage and early pregnancy. They also face a lack of gender-friendly school infrastructure such as water and separate sanitation facilities, especially girls who have reached the age of puberty.
Particularly on health, in a large number of African countries, health care is financed from a combination of sources, including government revenue, private insurance and out-of-pocket payments. In most African countries, out-of-pocket payments exceed public expenditure on health. Given women’s lower capacity to pay, out-of pocket payments reinforce women’s disadvantage in access to health care. This is one of the many reasons that we demand an increase in allocation of tax revenues for gender-responsive social services and infrastructure.
We want public audiences and policy makers to see tax justice as an integral part of the struggle for women’s rights and gender equality. Government leaders, who should be acting on these systemic injustices see this movement grow and they are advised that women will no longer tolerate oppressive taxation systems.
This year, the Make Taxes Work For Women campaign coincided with the silver jubilee of the Beijing Declaration and Platform for Action. Being only 10 years away from 2030 agenda for the United Nations’ Sustainable Development Goals, this was a reminder that we need to transform structural barriers that stand in the way of poverty eradication and the reduction of inequalities, including gender inequalities.
The World Economic Forum has determined that at current rates, it would take 202 years to close the gender gap in economic participation. Must we wait for that long to create systems that work for all? Systems that do not fail women? We already know that unfair tax systems threaten the realization of women’s human rights and the 2030 Agenda. We constantly need to remind ourselves as is stated in the report “push no one behind’’ that without fundamental reform to economic policymaking, the 2030 Agenda and other plans to promote gender equality and women’s rights will remain a distant aspiration.
We believe that taxation is an essential part of good governance and that its purpose is to raise revenues for public investments, redistribute wealth, and allow proper representation. We should all agree that women need to see the fiscal and distribution systems work better. Taxes are used to generate revenue for development. Social sectors like health, education and social protection need adequate amounts of budget allocation for a country to develop equitably. The coronavirus pandemic only sharpens these inequalities, and makes their redress more vital than ever.
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