Exploring gender dimensions in tax expenditures: advancing policy debates and informed decision-making
The 2024 ATI General Assembly, held virtually from June 18 to 20, brought together a diverse group of stakeholders from around the globe, focused on enhancing international cooperation in tax policy and administration. The ATI’s commitment to promote fair and efficient domestic revenue mobilisation (DRM), achieving the partnership’s vision of tax systems that work for people and advance the Sustainable Development Goals (SDGs), as expressed in the ATI Declaration 2025, was at the centre of discussion. As part of the event and in line with the partnership’s engagement on the topic of gender equality, on June 19, it hosted a side event on gender and tax expenditures (TEs). The session explored the nuanced and critical issue of gender biases in tax expenditures (TEs) and their broader implications on gender equality. Below is a summary of the main takeaways.
Integrating gender in broader fiscal policies
Kicking off the discussion, Giulia Mascagni, Research Director at the International Centre for Taxation and Development (ICTD), underscored the need to go beyond the implicit-explicit bias framework to better understand and improve the gender impacts of tax systems. Instead, she highlighted the profound need for a more integrated and comprehensive approach to achieving gender equality within the tax system. The traditional framework, while valuable in unveiling existing gender disparities and fostering initial reforms, often remains limited in scope. This is so because it fails to provide sufficient guidance to develop actionable policy reforms that can tackle the deep-seated and multifaceted nature of gender inequality.
To address this shortcoming, it is suggested to embed gender considerations within broader fiscal and political contexts. This means that gender analysis should not be confined to the tax system alone but should be incorporated into all aspects of fiscal policy. By doing so, policymakers can ensure that the root causes of inequality are more effectively addressed. This integrated approach necessitates a shift in perspective: instead of viewing gender equality as a peripheral issue, it should be regarded as a central objective within the overall fiscal strategy. The holistic perspective encourages the evaluation of a wide range of policy tools, encompassing both tax and non-tax measures, to achieve gender equity goals. For example, alongside reforms to tax structures, policies might include direct public spending on services that disproportionately benefit women, such as childcare and healthcare, or initiatives aimed at reducing the burden of unpaid care work, which predominantly falls on women. This framework ensures that policy interventions are not only reactive but also proactive in addressing systemic gender biases. Moreover, embedding gender considerations in fiscal policy requires a collaborative effort across various government sectors and departments. It calls for high-level political commitment and coordinated action to ensure policy coherence and effectiveness. This involves integrating gender analysis into the budgetary process, from the initial stages of policy design to the final implementation and evaluation. Such a framework ensures that gender equity is not merely an add-on but a fundamental aspect of fiscal governance.
To address the shortcomings of the implicit-explicit bias approach, we should embed gender considerations within broader fiscal and political contexts. This means integrating gender analysis into all aspects of fiscal policy, not just the tax system.
Mascagni also highlighted the importance of data in this integrated approach. Comprehensive and gender-disaggregated (fiscal and economic) data are crucial to understand the differential impacts of fiscal policies on men and women. This data-driven approach enables policymakers to make informed decisions and to design interventions that are tailored to the specific needs and circumstances of different gender groups. It also facilitates the monitoring and evaluation of policies to ensure they are achieving the desired outcomes and allows for adjustments to be made as necessary. The approach will, further, help identify and address implicit biases that may not be apparent. Implicit biases, that arise from the interaction of seemingly neutral policies with existing social and economic structures, often have far-reaching and unintended consequences. By considering the broader context in which these biases operate, policymakers can develop more effective strategies to mitigate their impact.
In summary, Mascagni emphasises the need for a paradigm shift in how gender equality is approached within tax policy. By adopting a more integrated and holistic perspective, embedding gender considerations within broader fiscal and political contexts, and leveraging a wide range of policy tools and comprehensive data, policymakers can more effectively address the root causes of gender inequality. This approach not only enhances the effectiveness of individual policies but also contributes to a more equitable and inclusive fiscal system overall.
Canada’s approach: a model for gender-based tax analysis
The 2018 Canadian Gender Budgeting Act serves as an exemplary model to institutionalise gender and diversity considerations within fiscal policy frameworks. This legislation represents a pioneering methodology, embedding gender sensitivity into the core of fiscal governance. The Act mandates the Ministry of Finance to conduct annual public reports on the gender and diversity impact of tax expenditures, thereby ensuring the transparency and accountability in fiscal measures. These reports are not mere formalities; they constitute a rigorous data-driven analysis that is crucial for informed policymaking. By systematically evaluating how different tax measures affect various genders and demographic groups, the Act facilitates the identification and rectification of biases that might otherwise perpetuate inequality. This proactive stance allows policymakers to adjust existing measures and design new ones that are more inclusive and equitable. Through these annual reports, the government is held accountable for its commitments to gender equality, making it a key component of its overall strategy for social justice and economic fairness.
By systematically evaluating how different tax measures affect various genders and demographic groups, the Act facilitates the identification and rectification of biases that might otherwise perpetuate inequality.
Nabil Annabi, Senior Director at the Department of Finance, Canada, in his presentation, shared Canada's methodology and findings underscoring the practical aspects and significant benefits of this gender-based analysis. He highlighted how the Evaluation and Research Group (ERG), within the Tax Policy Branch, has undertaken extensive medium-term planning and collaborated with academic experts and Statistics Canada to refine their methodologies and enhance data collection efforts. This meticulous approach has led to the publication of several comprehensive GBA Plus studies in the annual Report on Federal Tax Expenditures. Annabi's insights revealed the complexities involved in conducting such analyses, from determining the appropriate tax base —whether personal income tax (PIT), corporate income tax (CIT), or sales tax expenditures — to deciding on the type of impact analysis and the relevant indicators to use. He illustrated how Canada has navigated these challenges to produce meaningful and actionable outputs. For example, the analyses have shown that refundable credits, such as child credits, and progressive tax structures disproportionately benefit women, thereby narrowing the gender income gap. Various tax expenditures, including deductions, exemptions, and credits, generally, have different implications for men and women. While deductions tend to benefit higher-income individuals, often men, refundable credits usually target lower-income groups, significantly benefiting women. This understanding is critical to design tax policy that do not inadvertently exacerbate existing gender disparities.
The Canadian model exemplifies how gender-based fiscal analysis can lead to a more informed and equitable policymaking. It provides a robust framework that other countries can adapt and implement, fostering a global movement towards more gender-sensitive tax systems. The success of Canada's approach, as detailed by Annabi, underscores the importance of integrating gender and diversity considerations into the fiscal decision-making process, not as an afterthought but as a fundamental aspect of policy formulation and implementation. This data-driven strategy sets a benchmark for other nations striving to achieve gender equality through their fiscal policies.
Unveiling gender inequity in taxation
Husam Shareef, a Tax Expert, the Maldives, provided input from a report published on the gender assessment of the tax system in the Maldives. Sharing his journey during the preparation of the study, Shareef's contributions detailed the experiences and challenges faced by various countries in conducting a gender analyses of their tax systems, with a particular focus on tax expenditures (TEs).
The 2022 report, tasked with understanding the gender impact of the tax system in the Maldives, was conducted by the Ministry of Finance with support from development agencies. The results of the gender analysis, including tax expenditures, are limited due to the difficulty of the availability and accessibility of gender disaggregated data. The process observed systematic challenges in the collection, storage, and accessibility of relevant data. It mainly covered the goods and services taxes (GST) and income tax regime, while the data limitation posed particular challenge with respect to the CIT and PIT bases. The analysis started from a budget perspective where an ongoing budget process was assessed from a gender perspective. The study also covered the impact of specific taxes, such as the tampon tax. Since 2011, there has been years long policy debate about the tampon taxes as part of boarder policy changes meant to address gender-based discrimination. This led to the removal of GST on menstrual items, in 2019. The study, however, found that the impact of this change – that is, how much of the price reduction was passed on to the consumers or absorbed by the suppliers – has not been analysed. On tax expenditures, the study concluded that the removal of GST on childcare facilities – another important policy debate in the Maldives – is associated with an increase in the number of working women, which often carry the burden of childcare. The actual impact of this change is also yet to be measured. On a positive note, the Ministry is looking at some of the policy areas covered by the study as well as on the impact of GST on progressive outcomes.
In his input, Shareef emphasised the significance of a tailored approach to tax expenditures, considering the diverse economic behaviours and labour market structures across developed and developing countries. Policies that specifically address the unique challenges faced by women in different economic contexts, such as the informal economy prevalent in many developing countries, were highlighted as essential for effective gender equity promotion.
Future directions: building on insights from the ATI General Assembly
The 2024 ATI General Assembly’s side event successfully advanced the dialogue on integrating gender perspectives into tax policy. It showcased how thoughtful fiscal policies could drive gender equality and economic inclusivity. The presentations from the experts provided a compelling case for re-evaluating traditional frameworks and adopting holistic, data-driven approaches. The event reinforced the value of the Addis Tax Initiative as a hub for innovative tax policy discourse and collaboration. It is a call to action for stakeholders to engage more deeply in future ATI assemblies, where they can contribute to and benefit from cutting-edge discussions on tax policy and gender equality. The insights gained from such events are indispensable for crafting fiscal policies that are not only equitable but also pivotal in achieving the broader goals of sustainable development.
For those interested in the future of international tax policy, the ATI General Assembly remains a valuable platform for learning, sharing, and innovating. Participation in such events promises not only to enhance professional knowledge and networks but also to drive meaningful change in global tax governance.
