In a capitalist society, a nation’s trade industry heavily relies on the workmanship of its key players, which include skilled men and women contributing through both private and informal sectors to meet ever-increasing demands. Consequently, the world has shifted away from patriarchal ideologies that once confined women to domestic responsibilities, relegating them to submissive household roles for the benefit of a male-dominated economy. Yet, the journey to complete inclusivity for women in the workplace, especially where it concerns the gender pay gap, remains a work in progress.
In an effort to consolidate and generate dialogue around the gender pay gap and its impact on gender-inclusive taxation, the Catalytic Strategy—an initiative led by the International Women’s Forum South Africa (IWFSA) and WDB Investment Holdings (WDBIH)—assembled a panel on 25 October 2024 in Johannesburg, to unpack the complexities of gender disparities that increase the burden of taxation on women in the workforce. This gathering follows the publication of the Gender Pay Gap by the Joint Partners in August 2024.
Redressing the Past for a Better Gender-Equitable Society
In South Africa, gender disparities have evolved since the Apartheid era, which explicitly emphasised racial segregation and income inequality. The structural factors that shaped the nation have deepened the divide between the richest and poorest. At the upper end of the economic spectrum, the wealthy continue to benefit from increasing profit margins and high incomes, while those in lower-income brackets struggle to see meaningful improvements. Consequently, there exists a widening gap where, on the one hand, this economic inequality inhibits social progression upward for those in the lower-middle class but also exacerbates social divisions, hindering the nation’s development and social stability.
Understanding The Impact of Gender Bias on South Africa’s Tax System
Prof. Thabo Legwaila, CEO of the Office of the Tax Ombud and keynote speaker at the event, addressed The Current Landscape of South African Taxation and urged for reforms that could shape a more equitable economic future. Prof. Legwaila emphasised the importance of implementing gender-sensitive reforms in the tax system to address the unique challenges women face in both their personal and professional lives. He further stressed the need for comprehensive reforms to align with the evolving complexities of the South African economy, underscoring how effective tax policy can support national priorities of inclusive growth, employment development, and fiscal sustainability. Prof. Legwaila’s insights underscored the crucial role of tax policy in fostering a resilient economy that benefits all citizens.
As the panel unpacked the Gender Bias in Taxation, the experts from academia, the public sector, and tax advisory firms convened to discuss how systemic inequities disproportionately impact women’s economic participation and wealth accumulation.
As Khanyisa Cingo-Ngandu, the Director and Head of Tax Advisory Services at SNG Grant Thornton, emphasised, “The gender pay gap is the elephant in the room – women with the same qualifications are starting at lower salaries, which then compounds through the progressive tax system.” The panel also delved into how the unpaid care economy, predominantly shouldered by women, creates barriers to full workforce integration. It was also mentioned that there is a need to acknowledge and support the vital role women play in caregiving, which benefits society as a whole. In light of this, the entry of women into leadership roles holds promising outcomes, as women occupy key positions within the Office of the Tax Ombud. Even further, the involvement of women in the South African tax system in commissions such as the Margot Commission and the Davis Tax Committee showcases the pivotal role that women are playing in shaping an equitable and effective tax system.
Experts unpacked how deductions and credits, intended to be gender-neutral, often disproportionately benefit male taxpayers over their female counterparts. This is largely due to the systemic disparities in wealth accumulation and labour force participation, where women face greater barriers. As one participant noted, “On paper, the tax system may appear equitable, but in practice, it privileges those who have the assets and income to claim these deductions – a reality that overwhelmingly favours men.” The panel emphasised the need to redesign tax policies and incentives to actively support and empower women, recognizing that inclusive economic participation benefits society as a whole. With a solutions-oriented approach, the roundtable participants explored legal frameworks and policy interventions that could foster a more gender-inclusive tax landscape in South Africa.
Keith Engel, CEO of the South African Institute of Taxation (SAIT), participated in a fireside chat, where he commented on the complexity of implementing gender-specific tax policies. He noted, “While tax incentives, such as those for childcare, could help address some of the burdens women face, any changes to tax legislation must be informed by thorough dialogue and thoughtful consideration to ensure fairness and effectiveness.” This underscored the need for carefully designed reforms that address the root causes of gender-based disparities in the tax system, ensuring that any modifications are equitable and just.
Navigating Implicit Bias in Tax Legislation
The panel further explored whether the South African Tax Act is genuinely gender-sensitive or if implicit biases still exist despite reforms. Participants noted that while many explicit gender biases have been removed, household responsibilities and tax deductions still disproportionately affect women due to the fact that in South Africa, 40% of the households are headed by women. There was a call for more gender-sensitive approaches to tax policy, emphasising reforms that recognize the economic value of unpaid labour and aim to balance family responsibilities with fair tax benefits.
Key Takeouts from the Gender Inclusive Tax Roundtable
The roundtable highlighted several critical takeaways, including the need for policy changes that recognize the “care economy” and integrate support measures for unpaid labour into tax policies. There was a strong emphasis on exploring tax rebates and incentives, such as those for individuals supporting extended families, and benefits for employers who accommodate working mothers by providing subsidised childcare and extended maternity leave. Another suggestion was to review the tax brackets especially at the lower income levels to ensure that lower income earners are not unfairly burdened. Additionally, discussions underscored the importance of addressing any remaining implicit gender biases in tax legislation, ensuring that policies are genuinely gender-sensitive and equitable. Maintaining momentum from the event was seen as crucial, with a commitment to ongoing dialogue aimed at influencing future reforms that foster a gender-inclusive economic framework. The insights and recommendations from the roundtable will guide future actions toward creating a fairer and more equitable tax system, benefiting the broader society by fostering inclusivity and balanced economic growth.
Advocating for gender equality highlights the urgent need to consider tax reforms as one of the tools that can be used to address the persisting gender inequality in South Africa. The specific areas that need to be urgently looked at include unpaid work which women disproportionately carry and exploring ways to promote balanced policies that support families without straining the broader tax base. Beyond economic reforms, cultural expectations and the masculinity associated with senior roles often limit women’s growth and potential to assert their skills boldly. Therefore, institutional reforms and deliberate interventions to promote gender equality in the workplace and within communities are essential for both men and women to foster collaborative efforts toward a future that embraces complete equity.