While imposition of tax constitutes a vital instrument for the promotion of resource re-allocation, social equity through wealth distribution, increasing incidence of taxation in the contemporary tax reforms has exposed Nigerian women, particularly the rightholders—who are the worst hit, to the socio-economic burden of the various gender-insensitive tax policies.
Although women marginalisation in tax processes and responsibilities of government towards its citizens has hitherto constituted public and policy debates, effort to address the emergent plights of women under unwary tax regime hitherto remains lopsided and inadequate.
Apparently, the insensitivity and lop-sidedness feature in recent policy recommendations and public clamouring which centres on fiscal stimulus package for big corporations to mitigate impacts of Covid-19 with zero concern for the informal sector, where women and rightholders suffer consistently from the unchecked burden of multiple and illegal taxation/levies imposed by various authorities including unscrupulous tax/levies collectors.
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.
The extreme incidence of marginalisation is felt by the rightsholders who constitute the vulnerable mostly indigent, side-lined and socio-economic deprived group that dependent solely on little income or low-capital means of livelihood for the daily survival of their families. Most of the households headed by rightsholders lived below poverty line, estimated at $1.90 per person per day in 2019 World Bank Report.
Similarly, majority of the rightholders face real-time poverty, gross inequality, degrading treatment 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.
Regional engagements by Mothers and Marginalised Advocacy Centre (MAMA Centre) have revealed the degree of molestation from multiple, illegal and unjust taxation/levies regime against rightholders, 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, MAMA Centre has observed that rightholders, especially at grassroots level suffer greatly from the era of multiple taxes and harassments from some unscrupulous tax/levies 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 and rightholders 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 recently reviewed the rate upward to 7.5% as 1st February 2020, following the signing of Finance Bill (now Finance Act 2019) into law on 13th of January, 2020 by President Muhammadu Buhari. 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.
With the reported impacts of Covid-19 pandemic on socio-economic status of the rightholders, it is paramount for government at all levels to initiated implement specific sensitive policy to waive, extend and alleviate tax/levies burden on women and rightholders across informal sector.
The National Assembly must in its commitment to inclusion and equity prioritise women and rightholders in its Economic Stimulus Bill, 2020, sponsored by the House Leadership led the Speaker, Femi Gbajabiamila and other Members; with specific pro-poor provisions to provide temporary relief to women and rightholders in both formal and informal sectors to alleviate the adverse financial consequences of a slowdown in economic activities caused by the Covid-19 disease.
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, particularly the rightholders 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.
Grace Oriaku is a Rightholder and Volunteer under the aegis of The Voice Nigeria Project implemented by MAMA Centre in Enugu state.
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