Gender and Informal Systems of Local Public Finance in Sierra Leone - Vanessa van den Boogaard at #CSW63
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ICTD researcher, Vanessa van den Boogaard, participated in this year's UN #CSW63 on a panel evaluating gender and the intersectional effects of tax laws.
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Gender and Informal Systems of Local Public Finance in Sierra Leone - Vanessa van den Boogaard at #CSW63
- 1. International Centre for Tax and Development www.ictd.ac International Centre for Tax and Development www.ictd.ac Vanessa van den Boogaard Gender and informal systems of local public finance in Sierra Leone Research Fellow, International Centre for Tax and Development PhD candidate, University of Toronto 15 March 2019
- 2. International Centre for Tax and Development www.ictd.ac Tax and gender analysis has been too focused on formal tax policy and administration
- 3. International Centre for Tax and Development www.ictd.ac This overlooks the ways that individuals actually interact with tax systems in practice 0 2 4 6 8 10 12 1998 2003 2008 2013 PercentageofGDP Sierra Leone: Central government taxes on individuals relative to total taxes Income, capital gains, and profit taxes on individuals Total taxes excluding social contributions
- 4. International Centre for Tax and Development www.ictd.ac And has implications for how we understand gender inequities
- 5. International Centre for Tax and Development www.ictd.ac Case study: Gender and the realities of local public finance in Sierra Leone Three districts in eastern and northern Sierra Leone Household surveys (2013 and 2017) Complementary qualitative data collection (2016-17)
- 6. International Centre for Tax and Development www.ictd.ac Key finding 1: User fees and informal taxes are significant Central government taxes Local government taxes Formal chiefdom taxes Informal chiefdom taxes User fees Informal user fees Informal taxes to non-state actors Illegal state levies Mean proportion of expenditures on tax per annum, average for tax type
- 7. International Centre for Tax and Development www.ictd.ac Key finding 2: Female-headed households pay fewer formal taxes, but more informal taxes 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Incidence of personal income tax Incidence of payment: per cent of male: headed households Incidence of payment: per cent of female- headed households 0% 10% 20% 30% 40% 50% Incidence of informal taxes Incidence of payment: male- headed households Incidence of payment: female-headed households
- 8. International Centre for Tax and Development www.ictd.ac Key finding 3: Female-headed households face a higher tax burden for formal taxes…
- 9. International Centre for Tax and Development www.ictd.ac … as well as for user fees and informal taxes
- 10. International Centre for Tax and Development www.ictd.ac Conclusions Need to take into consideration user fees and informal taxes in analyses of tax and gender Need to consider implications for: Intra-household divisions of money and power Links between taxation and political representation Taxpayer engagement with the state
- 11. International Centre for Tax and Development www.ictd.ac International Centre for Tax and Development www.ictd.ac Vanessa van den Boogaard Research Fellow, International Centre for Tax and Development PhD candidate, University of Toronto v.vandenboogaard@utoronto.ca @vvandenboogaard
Editor's Notes
- As we discuss the possibilities for tax policy to reinforce or address gender inequities, I want to make the case for expanding the lens of our analysis to include informal systems of taxation and local public finance in addition to the more traditional forms of tax that we normally talk about.
- To date, research in this area has largely focused on high-income countries, so it is perhaps unsurprising that policy-oriented work has tended to think about tax and gender through a narrow lens, predominately focusing on identifying biases in formal tax policy and associated systems of filing or exemptions.
- This is problematic as it leads us to overlook the ways in which individuals actually interact with tax systems in low-income countries. Despite some evidence of structural bias in formal tax systems, in practice the impact of these biases is limited as very few people – at least in sub-Saharan Africa – actually pay direct taxes to the central government. > Figure: SL – central govt taxes on individuals represent only 1.7 percent of GDP In reality, user fees are often more important to the financing of local public goods and services. And while formal taxation is limited, citizens often contribute substantially outside of the formal tax system to the construction and maintenance of local public goods through what is known as informal taxation. These are payments made to state or non-state actors (in cash, in kind, through labour) that are enforced outside of the formal legal system – They’re often necessary to access basic services, and can be an important means of filling the gaps left by the state or complementing state service provision.
- Because of their importance to financing local public goods (that would otherwise be financed by taxation), not including user fees and informal taxes in analyses of gender and taxation in low income countries will leave us with an incomplete picture of gender inequities – which may be embedded in both formal and informal structures and institutions.
- I use this broader lens of analysis to explore gender inequities in Sierra Leone. This analysis relies on two household surveys capturing tax incidences and burdens, as well as over 8 months of qualitative data collection, including extensive interviews and focus group discussions. Share three key findings.
- First, I find that formal taxes have a small impact on the majority of citizens: > Central government taxes are paid by only four per cent of all survey respondents > local government revenues amount to only about $1 per capita, despite extensive decentralization following the civil war. By contrast, user fees are the most widely paid levies by survey respondents, and make up the largest payment type as a proportion of income. At the same time, informal taxes and user fees are significant, making up almost a third of total payments made by households, with 69 percent of households reporting having paid at least one informal tax to access public goods in the previous 12 months. This data bolsters the point that in order to understand the gendered effects of systems of public finance, we need to also consider the gendered impacts of user fees and informal taxes.
- Second, I find that female-headed households pay fewer formal taxes and user fees than male-headed households. This is unsurprising for several reasons: > Women have lower incomes and are more likely to fall under tax thresholds > At the same time, tax payment is shaped by gendered interaction between the state and its citizens, evolving out of colonial structures. For example, at the local level, women were not considered eligible taxpayers until the post-war period, and this has left lingering gendered sentiments about women’s duty to pay taxes to the govt. But while female-headed households pay fewer formal taxes, we also see that female-headed households are more likely to pay more informal taxes to access public goods and services. And there is abundant evidence that women play a critical role in communal-level forms of self-help and public service provision that involve levying informal user fees, including with respect to management of schools and water wells.
- Finally, I find that despite no gender inequities being entrenched in policy, female-headed households pay a larger proportion of their income towards tax than male-headed households. This is true across all of the most prominent types of taxes. For example, despite higher rates of land ownership amongst male-headed households, female-headed households are more likely to pay a greater proportion of their income in property tax.
- This is also true for user fees and informal taxes, which, because they are more likely to be flat fees, they are more likely to be regressive and can lead to discrimination against women and girls when they’re required for basic public goods such as health, education, water and sanitation.
- The fact that female-headed households pay more informal taxes and pay greater proportion of their income in both formal and informal taxes reinforces the need to include user fees and informal taxes into analyses of the gender impact of systems of local public finance. Gender inequities are embedded within social, political, and economic structures; understanding these inequities thus requires looking at the full range of these structures, both formal and informal. (2) This research also raises questions about the implications of these gendered impacts, for example with respect to: > Gender-based differences in intra household budgeting, money and power – what are the different division of responsibilities for tax payment and fees to access services, with what implications? > Links between taxation and political representation – if women pay fewer formal taxes than men, do they miss out on the channels of political representation that are often thought to come with tax payment? > Link to taxpayer engagement with the state– given that taxation is often seen as a key means of shaping the ties between state and society, do gender differences in payment affect how taxpayers engage with the state in broader ways?