By Abubakar Jimoh
While imposition of tax remains a vital instrument for the promotion of resource re-allocation, social equity through wealth distribution, women marginalisation in tax processes and responsibilities of government towards its citizens has hitherto constituted public and policy debates, but with little effort to address the emergent plights of women under unwary tax regime.
With increasing incidence of taxation in the contemporary tax reforms, Nigerian women are worst hit by the socio-economic burden of the various gender-insensitive tax policies.
It would be recalled that in September 2015, Nigeria joined the rest of the world at United Nations’ High Level Plenary Summit for the adoption of Structural Development Goals (SDGs) with 17 goals and 169 targets as part of the global efforts to build a comprehensive development plan in order to complete the unfinished business of the Millennium Development Goal (MDGs).
Adopting the SDGs, at country level with Goal 1 and 5 promising to: end poverty and hunger in all its forms everywhere; and achieve gender equality and empower all women and girls, respectfully, Nigeria is committed to address poverty and ensure equal opportunity for women in all socio-economic and political ramifications. However, the existing gender-biased tax regime remains a major impediment that if not strictly addressed may backpedal or obstruct the country’s success in the implementation of SDGs.
In every tax regime, women are either implicit or explicit marginalised. Explicit marginalisation in the analysis of German Technical Cooperation (GTZ) emanates from specific provisions of the law, regulations or proceedings that deliberately treat men and women differently, while implicit marginalisation describes differences in the way the tax system (or any tax policy measure) affects men’s and women’s well-being.
Explicit marginalisation occurs in the Personal Income Tax system where the tax law discriminates against married women with respect to tax reliefs and allowances. Hence children’s allowances are claimed by the husband as long as he is not legally separated from his wife. Implicit marginalisation on the other hand is found in marriage tax marginal rates, Value Added Tax (VAT), excise or selective taxes, import duties and export duties.
Besides, various assessments of the Personal Income Tax burden have revealed that the average tax paid for equivalent levels of income is higher for female taxpayer than male, as married men are granted the tax relief on the assumption that men are breadwinners.
It is noteworthy that apart from constituting over 50 percent of the world’s population, women perform two-third of the world’s work, and receive one-tenth of the income. They in proportion represent 70 percent of the world’s one billion poorest people.
Similarly, majority of Nigerian women face real-time poverty, gross inequality, molestation and injustice resulting from insensitive tax collection and administration processes, which deny them the opportunity to meaningfully earn and contribute positively towards the nation’s development. The degree of molestation from multiple and unjust taxation/levies regime is evident and well documented in various encounters by Civil Society Legislative Advocacy Centre (CISLAC) with women, especially in informal sectors across the country.
While women constitute a high percentage of the population engaging in informal sector business like farming and trading, the local market women are the worst hit by the era of multiple taxes and harassments from some unscrupulous tax collectors, who endlessly extort whopping sums from the innocent women.
It is worrisome that the era of multiple taxations has led to drastic loss in profit generation, and continuous discouragement of women’s participation in the nation’s socio-economic development as against Goal 5 of the SDGs with specific pledge to “achieve equality and empower all women and girls”.
As related to the women in formal sector, although Nigeria has the highest population in African continent, as reports by 2012 Gender in Nigeria Report, with 38 percent of its women lacking formal education as against 25 percent for men, the disparity in education attainment largely undermines women’s earning capacity and well-being under personal income or direct tax burden as most women earn too little to pay a significant amount of personal income tax. Indeed, the heavy tax rate imposes on taxpayers through personal income tax poses unequal impact on women.
Also, the imbalanced Value Added Tax (VAT) system is another endemic challenge to the women’s earning and well-being. The VAT Amendment Act 2007 removed the 5 percent fixed rate and gave the Minister of Finance Power to determine the VAT rate. Exercising the authority, the Minister of Finance raised the rate to 10 percent, but later repealed its decision with the rate returned to the initial 5 percent. Nigerian women are known to purchase more goods and services that promote health, education and nutrition compared to men.
In 2004, the Nigeria Living Standards Survey report by the National Bureau of Statistics showed that over 50% of the expenditure by female headed households was on non-food items which as likely to attract VAT. This in the observations of GTZ creates the potential for women to bear a larger burden of VAT, especially if the VAT system does not provide for exemptions, reduce rates or zero-rating.
Given the existing intense tax burden on women, it has become imperative that policy and development interventions through taxation must take cognisance of the plights of women in order promote sustainable economic growth and poverty eradication, if Nigeria is determined to achieve its global commitments under Goal 1 and 5 of the Sustainable Development Goals (SDGs).
The National Tax Policy should be reviewed with committed and sincere efforts to address gender insensitivity in the collection, administration and utilisation of tax revenues as well as mainstreaming of gender-sensitivity into tax practices and tax policy formulation.
More importantly, appreciable efforts must be made by the governments to resolve the growing incidence of multiple taxation/levies in the informal sector, especially at local government level as self-employed and poor women are mostly victims of multiple taxation/levies which consequently reduce their profits and welfare.