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Blog August 31, 2022

Blog: Smarter taxation to boost health and revenue outcomes

In this blog, Marcello Estevao, Global Director, Macroeconomics, Trade and Investment discusses how supporting health tax reforms can help countries improve health and revenue outcomes. Health taxes can mobilize substantial additional revenue for governments to increase their developmental-related spending. As health taxes will have an increasingly important role in tax systems, GTP's Health Tax Workstream is supporting countries in implementing health tax reforms.

Read more on health taxes here

Gender Equality and Tax Reform

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  • Despite the progress made in the last decade, gender inequality prevails globally, especially in low-income countries. COVID-19, economic and humanitarian crises and food insecurity have further exacerbated gender gaps.

    Public expenditure has long been recognized as an instrument to support education, health, and labor market participation for men and women. However, there has been little attention paid to the role of the revenue side of the fiscal equation in advancing gender equality goals in low and middle-income countries.

    In September 2021, with support of the Government of the United Kingdom, the Global Tax Program launched the Gender Equality and Tax Reform Workstream to explore the gender dimensions of tax policy and reforms. The workstream’s objective is to help low- and middle-income countries improve their capacity to formulate tax policies and tax administration reforms that contribute to the gender equality goals.

    Priority Areas

    The World Bank is uniquely positioned to develop a work program on gender equality and tax reform. We have a global reach with offices in over 130 countries and staff from 170 countries, predominantly in low- and middle-income countries. Our analytic work supports country lending operations and policy dialogue with key officials in Ministries of Finance and Tax/Revenue Departments, as well as local academic institutions and civil society. Staff members and experts of the Global Tax Team at the World Bank combine both strong technical expertise and global knowledge to support in-country teams and clients and share knowledge across countries.

    Our work under the Gender Equality and Tax Reform Workstream aims to support authorities with analysis to incorporate gender equality into tax policy and tax and customs reform strategies. The activities compromise both analytical and advisory service activities under three priority areas:

    • Develop global public goods to help tax policy practitioners incorporate gender equality objectives into tax incidence analysis while complementing ongoing efforts at the World Bank to build a framework for gendered fiscal incidence analysis in developing countries.
    • Strengthen countries’ analytical capacity to make decisions on tax policy reforms with a gender lens. 
    • Improve countries’ capacity to design and implement tax and customs administration reforms with gender equality goals.

  • Select examples of our work on gender equality and taxation:

    The ongoing work supported by GTP in three countries illustrate how fiscal policy tools can contribute to gender equality:

    Ethiopia

    Survey data on tax payments and individual disaggregated land ownership can help policymakers understand how tax burdens differ for the groups that are most economically vulnerable, such as women. However, data in this area has been limited to assess the distributional analysis of land tax policy.

    To assess the tax burdens and needs of poor women and men, a tax and transfer module was included in the 2018/19 Ethiopia Socioeconomic Survey. This dataset also contains intra-household asset ownership by men and women, which, when matched with tax data, enables analysis of different types of taxes on businesses and land ownership. There are four ongoing studies based on this new data, which is helping the government understand the impact of various tax policies on male and female households and businesses.[1] These studies will inform the World Bank’s dialogue with the Ministry of Finance on the country’s comprehensive tax policy reforms that seek to enhance revenues over the coming years.

    India

    Property rights are important for women; immovable property such as land and housing can serve as collateral for business loans, bring in rental income, and provide economic security for women to cushion shocks. A new World Bank study in India used qualitative techniques to explore whether property tax discounts can incentivize women’s property ownership.    

    Through focus groups with male and female taxpayers in six states and cities, and interviews with 20 revenue and land administration officers in eight locations, the study sought to understand the implementation of legal measures that provide concessions for the purchase or transfer of property in women’s name and discounts on recurrent property tax for women-held properties. The study found that discounts on stamp duty have encouraged female property ownership, likely because the amount of the discount is substantial. The impact of the stamp duty is even greater when coupled with non-tax incentives, such as loan concessions for women buying properties in their name. Future research can build on these findings to quantify and disentangle the effects of tax and non-tax incentives.

    Pakistan

    The provisions of tax laws and regulations impact women and men differently because of existing gender patterns in poverty and vulnerabilities, employment, social arrangements, consumption, and property. Identifying and removing gender differences in the tax system can incentivize women to participate in the labor market and become taxpayers, increase tax revenues and productivity, and in turn, economic growth.

    Two provinces of Pakistan - Khyber Pakhtunkhwa (KP) and Punjab - are examining gender differences in taxpayers’ needs and tax burdens, respectively, to design better tax reforms.

    The KP Government plans to roll out one-stop Taxpayer Facilitation Centers (TFC) and digitize tax services so that taxpayers can file and make payments online.  The World Bank study will interview 1,000 taxpayers, who will include both men and women taxpayers, to identify the gender differences in taxpayers’ needs, experiences, and constraints in filing and payment. Based on the survey, the study will make recommendations to address gender-specific needs. This study also contributes toward the objectives of the ongoing IDA-funded project, the Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management Program (KPRMP), which supports the establishment of TFCs and digitization of services. 

    The Punjab government has recently enacted a series of laws to increase women’s rights to inheritance and land ownership. A second World Bank study will help assess the gender implications of the Urban Immovable Property Tax by examining how the differences in property types owned by women and men affect their tax burdens and compliance. The study supports the objectives of the ongoing IBRD-funded Punjab Resource Improvement and Digital Effectiveness (PRIDE) Program.

     

    [1] Outputs include papers on Gender and Agricultural Income Tax and Rural Land Use Fee; A Gendered Fiscal Incidence Analysis; Gender, Children and the Fiscal Space; and Gender and Presumptive Taxation.

  • Blogs:

    Events & Stakeholder Engagements:

    Publications and Research:

    Related Links and Resources from across the World Bank:

    Female entrepreneurship and tax reform: