It's time to tax for gender justice
Unfair tax systems hit women and girls the hardest. We need to make corporations pay their share.
This article is part of the 'Advancing gender just economies' series, presented by ourEconomy, ActionAid, FEMNET, Womankind Worldwide and Fight Inequality Alliance.
Last week, the United Nations General Assembly (UNGA) convened a High-level Dialogue on Financing for Development (FFD). FFD is the process supporting the financing of the 2030 Agenda for Sustainable Development made up of 17 Sustainable Development Goals (SDGs) and other UN development and human rights frameworks and conventions including Beijing Platform for Action. This is the first high-level dialogue since the adoption of the Addis Ababa Action Agenda in 2015, where feminists, women’s rights organisations and civil society campaigned for an inclusive intergovernmental body within the United Nations to reform international tax rules to finance public services and to realize gender equality.
Why do these financing decisions matter to gender equality and women’s rights? With close to a decade remaining for the curtains to fall on Agenda 2030, this is where states show if they are putting their money where their mouth is and decide where the money for the SDGs is coming from and what actions will be prioritized. Women’s voices go largely unheard in the policy debates dominated by global capital. While States accommodate corporate demands for tax incentives, the needs of women and demands to tax corporations fairly are neglected. Women face challenges due to inadequate financing for and provision of public services, as regressive tax policies and underfunded public services perpetuate women’s disproportionate responsibility for unpaid care and domestic work.
In Agenda 2030 world leaders committed to recognising and valuing unpaid care and domestic work through the provision of public services, eliminating all forms of violence against women and girls and tackling inequalities. Where the money comes from to make this a reality and what areas are prioritised are quite telling. For example, UN Women estimated that National Action Plans for Gender Equality had funding gaps of up to 90% in 2017. Tax is a gendered issue, meaning unfair tax systems threaten the realisation of women’s human rights and Agenda 2030. They further contribute to increasing levels of gendered socio-economic inequality—exacerbated by the global fiscal austerity trend. Progressive tax revenue through domestic resource mobilisation is critical to addressing structural and systematic global inequalities and making it possible for countries achieve women’s human rights.
From tax avoidance to tax and development justice
The High-level dialogue includes prime ministers, finance ministers, high ranking representatives of international finance institutions, private sector and a few civil society ‘experts’, and aims “to renew global commitment to financing at the highest political level.” It further aims to “encourage public and private investment to align with the 2030 Agenda, and promote new and innovative initiatives that target gaps in financing sustainable development.” Yet, in spite of ‘combatting illicit financial flows’ (IFFs) being on the agenda, the private sector is seen to play a big role in addressing this financing ‘gap’, rather than as a source of progressive tax income.
Current rigged economic structures and systems allow corporates to dodge taxes, shifting income to tax havens and contributing significantly to the vast levels of IFFs leaving developing countries. These illicit financial flows allow multinational corporations and wealthy individuals to avoid paying their fair share in tax. More than 65 percent of IFFs are proceeds from commercial activities, with countries missing out on at least USD600 billion in public revenue annually and an estimated USD20-30 trillion sitting in tax havens. Africa loses 5.5% of GDP to IFFs, which is larger than the total of foreign direct investment and official development aid (ODA) combined.
Increasingly, states are favouring privatisation of essential services and infrastructure. The World Banks’ 2015 Maximizing Financing for Development agenda, ‘From billions to trillions’, is directing public tax payer funds through development banks to the private sector to deliver services, more so in low income countries. The current trend in privatisation and its impact on the right to essential services is well documented, including how it undermines women’s rights and the Sustainable Development Goals.
Tax is by far the most important revenue stream for developing countries, and is already dwarfing development aid in many contexts. In Africa in 2012, collected tax revenue was 10 times the amount of overseas aid received. Yet states could raise more to increase their budgets. In particular, it is critical for developing countries to raise taxes from Transnational Corporations (TNCS), as corporate income tax makes up 16 percent state revenue compared to just over eight percent in high income countries.
The Addis Ababa Action Agenda and Agenda 2030 ‘commit governments to take the necessary measures to raise resources for gender equality and the empowerment of women and girls’. Not only is financing for gender equality vital in its own right, it is a missing piece to the realisation of SDG 5 on Gender Equality and the rest of the UN’s 2030 Agenda.
The impact of tax policies on women’s human rights
Despite these commitments, austerity measures pushed by international financial institutions (IFIs) have been implemented around the world. Policies include changes to how taxes are collected, privatising public goods, freezing public sector wages, reducing social security and reforming pension systems. Such austerity measures widely impact the enjoyment of social and economic human rights, particularly for women who are the most affected by all forms of tax injustice, the privatisation of public services and unemployment.
The current system based on a neoliberal vision of a small state and low taxes has evidently led to a race to the bottom in terms of labour standards, safety and environmental regulations, and tax rates, not to mention the current climate crisis. Combined with the failure of decision-makers and states, especially in the Global North, to create binding corporate accountability frameworks, there is widespread environmental pollution, social insecurity, land grabbing and forced displacement, but also illicit financial flows and tax abuse. The impact of corporate impunity on women’s lives is well documented. Low tax collection by governments means there are fewer resources to spend on public services and social security. It is more likely to be women who fill the gap with their bodies and time. This especially affects the most vulnerable women.
Women subsidize the economy with their unpaid work, performing the majority (76.2 percent) of global unpaid care and domestic work, estimated at $10 trillion a year worldwide or 13 percent of global GDP. Women’s disproportionate unpaid care burden is a root cause and driver of gender inequality and has a profound impact on women’s ability to earn an income and realise the full spectrum of their human rights.
Making taxes work for women
We need a just distribution of resources for a fair global economy. Fiscal choices have gendered impacts. Consequently, states should ensure resources are used to promote redistribution and do not increase the burden on women. Resourcing feminist and women’s rights movements is also vital in supporting women’s rights. To increase the amount of revenue raised from wealthy individuals and corporations we need national and global tax reform. In order for states to fulfil their obligations they must introduce progressive taxation using maximum available resources to achieve women’s rights.
Global Alliance for Tax Justice* (GATJ), a growing movement of civil society organisations, activists and trade unions, states that ‘Tax policies and systems manifest and exacerbate the patriarchal and other discriminatory structures that disadvantage, marginalise and disempower women.’ It demand that states:
- Meet international commitments to maximise available resources – notably through progressive and gender-just taxation.
- Reform tax laws so that they do not discriminate against women and ensure tax and fiscal policies recognise and serve to represent, reduce and redistribute unpaid care work.
- End harmful tax practices, illicit financial flows, and ensure that multinational corporations pay their share.
- Support the establishment of an inclusive intergovernmental UN Global Tax Commission, where all countries have a seat at the table and equal say in determining international tax rules.
With 2019 being the 75th anniversary of the Bretton Woods Institutions, and the upcoming 25th anniversary of the Beijing Platform for Action and five years of progress made on the SDGs in 2020, this High-level Dialogue on FFD is an opportunity for states and the global community to address the barriers that prevent the economy working for all including all women and girls. Let’s hope they take it.
If you are interested to learn more about how tax justice can support women’s rights:
- Sign the Global Alliance for Tax Justice Bogota Declaration on Tax Justice for Women's Rights and read 7 Reasons Why We Need #TaxJustice for Women’s Rights.
- Read Womankind Worldwide’s Working towards a just feminist economy: The role of decent work, public services, progressive taxation and corporate accountability in achieving women’s rights.
- Read about how a UN Binding Treaty on Business and Human rights can enable women’s rights in Women’s Rights Beyond the Business Case: Ensuring Corporate Accountability.
*The Global Alliance for Tax Justice is a growing movement of civil society organisations and activists, including trade unions, united in campaigning for greater transparency, democratic oversight and redistribution of wealth in national and global tax systems. We comprise the five regional networks of Africa, Latin America, Asia-Australia, North America and Europe, which collectively represent hundreds of organisations.
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