FIFI PETERS: On paper it seems that males and women are taxed the identical however, in actuality, a higher tax burden falls on women and that is deepening the gender earnings inequality.
To talk about this additional and what might be finished to degree the gender pay hole, I’m joined by Dr Lee-Ann Steenkamp, a senior lecturer in taxation at the Stellenbosch Business School. Ma’am, thanks a lot to your time.
I discovered this research actually fascinating. In truth, a male pal of mine from college introduced this to my consideration. I’d such as you to begin off by serving to us higher perceive the report. So clarify the numbers to us and the way women truly find yourself paying extra tax than males.
Dr LEE-ANN STEENKAMP: Good night, Fifi, and thanks a lot for having me.
On the face of it there doesn’t seem to be any specific gender discrimination. We do in any case have a unisex income-tax desk. That’s what I believed till I began with this analysis a few months in the past, and what I’ve realised from doing a gender evaluation on the tax statistics – that are launched by the South African Revenue Service, Sars, every year – is that women still congregate within the decrease income-tax brackets.
Over time, though the variety of women who kind a part of the income-tax base has elevated to about 46%, they contribute solely one-third of the earnings taxes which are collected. So there’s undoubtedly some discrepancy there, which led me to scratch a bit deeper.
The second factor I then realised is that, when you mix this info with the statistics from Stats SA, we see that there’s a vital variety of households, greater than 40% the truth is, that are headed by feminine breadwinners.
Added to that’s that women carry a a lot increased burden when it comes to child-rearing, particularly single mother and father.
So 42% of kids dwell with solely their single moms, versus 4% with solely their single fathers. What this implies is, when we mix these statistics, we see that though males and women are taxed equally, the underlying socioeconomic situations imply that women earn much less, they carry out a lot extra unpaid caring work, and so they have to make their decrease earnings stretch additional to handle youngsters, aged mother and father, and sick members of the family, for instance.
FIFI PETERS: I see that the discrimination extends to even that. Explain how that occurs.
Dr LEE-ANN STEENKAMP: That’s true. What the worldwide analysis exhibits us is that in most growing nations lower-income women bear the very best brunt of value-added tax, or Vat. Again, this may be ascribed to the gender roles that males and women carry out. Men are still seen historically because the breadwinner, women because the caregiver staying at residence [and] caring for the youngsters.
So women then have a tendency to spend their decrease incomes extra on the collective family items – caring for the youngsters, paying the college charges, taking them to the physician, and so forth. So the Vat burden then disproportionately falls on lower-income women versus males.
We do want extra gender-disaggregated knowledge to observe the consumption patterns of males and women in South Africa, however that is what the general statistics revealed to us.
FIFI PETERS: Just when it comes to the broader tax implications on earnings particularly, the place on paper it appears to be like like we’re paying the identical however in actuality we’re not, is that this distinctive to South Africa or is that this occurring in every single place else on this planet?
Dr LEE-ANN STEENKAMP: It’s sadly not distinctive to South Africa at all. This is going on the world over and never simply in growing or rising economies. There are some fascinating examples that I can refer listeners to in the event that they care to obtain the Women’s Report, which is obtainable without cost. If you look at info from the Organisation for Economic Cooperation and Development, the OECD, the United Nations and the International Labour Organisation, we additionally choose up comparable tendencies in lots of different nations.
Again, this may be ascribed to the prevailing gender pay hole, which has narrowed over time, luckily.
But in South Africa there may be still on common a 16% gender pay hole.
It varies from sector to sector. But, much more importantly, it’s a proven fact that women’s careers have a tendency to be one-third shorter than these of males; women take profession breaks to increase youngsters. There are extra women in part-time work than there are males. And all of those underlying elements mixed filter via into our tax statistics and we are able to undoubtedly see that from the gender-disaggregated info within the Sars statistics.
FIFI PETERS: All proper. Solutions? You’re calling for affirmative motion in favour of women for income-tax regulation. What does affirmative motion when it comes to taxes appear like?
Dr LEE-ANN STEENKAMP: Well, firstly we’d like to perceive that tax is a part of fiscal coverage, and monetary coverage is a part of the nation’s overarching macroeconomic coverage. So it’s not as straightforward as simply asking authorities to tweak the tax legal guidelines a bit in favour of women. The authorities has completely different targets that it wants to realise to stability inflation with the nation’s borrowings and rate of interest, and so forth. But we’d like to get this dialog began, and we undoubtedly want extra analysis on this. I’ve barely scratched the floor of this analysis.
Taking a pragmatic strategy, I believe there are some quick issues that Treasury may examine. For instance, including extra gadgets to the zero-rated record within the Vat Act, particularly concentrating on these items that lower-income households, particularly single mother and father, have a tendency to buy, after which additionally contemplating reintroducing a tax rebate for childcare prices – which we had within the earlier tax dispensation below the apartheid regime.
In the United States, for instance, taxpayers can get a tax rebate which reduces your tax legal responsibility for some childcare prices, after-school care, transport to and from faculty – which we presently don’t have.
I believe that will go a good distance in direction of assuaging the burden, particularly on single mother and father and much more on single moms.
FIFI PETERS: You even recommend interventions comparable to a increased tax threshold for women, tax breaks for female-owned companies, and decreased tax charges on property owned by women. You did allude to [it being] a part of broader fiscal coverage, so it might be fairly advanced to implement, however are a few of these issues being finished elsewhere? Do now we have a sensible instance that we are able to use as finest follow?
Dr LEE-ANN STEENKAMP: Yes, that’s how I got here up with a suggestion. So when I did my literature evaluate, wanting at what different nations are doing I recognized some options that I believe could be tenable in South Africa.
I believe there’s additionally a good alternative for the subsequent tax fee, which is able to hopefully be established within the close to future, to be particularly mandated to examine the gender points across the tax system as a result of, as you say, Fifi, we’d like to take a chook’s-eye view strategy on this.
I’m not saying that simply since you are a girl, you must get a tax break. There needs to be means examined and [a look at] horizontal and vertical fairness within the tax system, in order that we are able to get focused tax aid the place we’d like it most.
FIFI PETERS: Thanks a lot, Dr Steenkamp. I actually thought that this was an insightful dialog, an vital one economically – and let’s hope the fee does choose up on this and take your investigation additional.
Dr Lee-Ann Steenkamp is a senior lecturer for taxation at the Stellenbosch Business School.