A resolution adopted last 15 January 2019 by the European Parliament recognises the importance of tax justice for women’s rights and calls governments to ensure their tax systems protect and promote gender equality. This decision was based on a joint report by the Committee on Economic and Monetary Affairs and the Committee on Women’s Rights and Gender Equality of the European Parliament, which highlights the differential impacts of taxation on women as well as gender bias of tax systems. Here are some key points of this ground-breaking decision:
Go for individual taxation. Taking into account that tax policies have varying impacts on different types of households, and that households do not always share their funds equally, the report recommends individual taxation as an instrument to achieve tax fairness for women.
Tax incentives must not be discriminatory. The European Parliament calls on governments to ensure that tax incentives related to employment and self-employment do not discriminate on the basis of gender, and to consider tax incentives and other fiscal benefits for second earners and single parents. It notes that gender bias may occur also in work-related tax deductions and exemptions, such as favourable tax treatment of extra working hours, which benefit mostly professions that are currently occupied by men.
Personal income tax should promote equal sharing of work. The resolution also stresses that personal income tax must be designed to actively promote equal sharing of paid and unpaid work, income and pension rights between women and men, and to eliminate incentives that perpetuate unequal gender roles.
Rationalise tax incentives given to corporations. Regarding corporate taxation, the call is to rationalise the tax incentives or breaks governments give to corporations, to ensure that they mostly benefit small enterprises and favour real innovation, as well as to assess ex ante and ex post the potential impact of these incentives on gender equality.
Provide childcare services. The resolution calls to improve the availability and accessibility of affordable and high-quality childcare services through tax incentives, in order to reduce the obstacles for women to taking up paid employment and contribute to a more equal distribution of paid and unpaid work within households, and thus minimise gender pay and pension gaps.
Provide for VAT exemptions. The resolution also reminds that Value-Added Tax (VAT) exerts a gender bias because of women’s consumption patterns, which differ from those of men as they purchase more goods and services with the aim of promoting health, education and nutrition. So this, combined with women’s lower income, leads to women bearing a relative larger VAT burden. The European Parliament calls on governments to provide for VAT exemptions, reduced rates and zero-rates for products and services with positive social, health and/or environmental effects. It also regrets that female hygienic products, and care products and services for children, elderly people or people with disabilities are still not considered as basic goods in all Member States. It calls to apply exemptions or 0% VAT rates to these essential basic goods.
Regular gender impact assesments. The resolution calls on the Commission and the States to carry out regular gender impact assessments of fiscal policies from a gender equality perspective, focusing on the multiplier effect and implicit bias to ensure that neither direct nor indirect discrimination feature in any fiscal policies in the EU.
Greater transparency on tax information of companies. Finally, the European Parliament recalls its position on the proposal for a directive on public country-by-country reporting, which proposes measures to enhance tax transparency and public scrutiny of multinational enterprises, as this would allow the wider public to have access to information about the profits made, subsidies received and taxes paid in the jurisdictions where they operate.