By Herni Ramdlaningrum & Dr. Desintha Dwi Asriani
Tax officer of KPP Pratama Jakarta Tanah Abang Tiga (left) helps a taxpayer fill out the annual tax return report at the Parliament Complex, Senayan, Jakarta, Wednesday (16/3/2022). BETWEEN PHOTOS/Aprillio Akbar/tom.
..a fair taxation system will have a direct impact on gender equality.
Jakarta (ANTARA) - Kartini Day which falls on April 21 is a momentum to re-discuss the meaning and achievements of gender equality, as Kartini is an emancipation figure who contributes to the dismantling of a culture of gender-based injustice.
In the context of Indonesia, many initiatives have been taken to initiate gender-just development, starting from advocacy in the form of empowering women to formulating policies with a transformative gender perspective.
One of them is regarding the tax system. In the G20 Presidency, the framework underlying gender responsive taxation policies has even become one of the priority issues proposed by the C20.
The main idea is a system of applying the tax burden that is not gender neutral due to the different roles and needs of women and men. For example, providing tax incentives and full salary to women who are on maternity leave.
Thus, there is an inclusive policy that is expected to further increase the participation of marginalized groups such as women in the economic sector.
Indonesia, which for the first time this year held the baton of the G20 Presidency, has full involvement in proposing tax policies with a gender perspective.
Civil society organizations (CSOs) who are members of the C20 are also involved in officially providing input and responses to the main issues that will be discussed by the G20 leaders. Currently there are more than 300 CSOs around the world who are members of the C20 which provide proposals including those related to taxation issues.
The important point to be emphasized is that the gender dimension in taxation is a fundamental basis for building a just redistribution system.
So far, the government's efforts to collect public funds from both corporate and individual income have been negated by irresponsible practices, such as tax evasion and evasion. Consequently, the state has fiscal constraints to manage directly for equal welfare.
The problem of illicit financial flows which lead to efforts to ease the tax burden by using loopholes in tax regulations. Meanwhile, tax evasion is against the law by manipulating transactions to reduce or avoid the obligation to pay taxes.
The practice of tax avoidance and evasion has clearly contradicted the gender principles contained in the Gender Equality Parameters in the Formation of Legislation, namely the principles of substantive equality, non-discrimination and state obligations (KPPA, 2012).
In the context of gender, the universal taxation system has unfavorable consequences for women. For example in the application of VAT (Value Added Tax). VAT or Value Added Tax (VAT) is a tax levied on any added value of goods or services in circulation from producers to consumers.
Meanwhile, women are actors who play a major role in providing basic household needs.
This is related to the different gender roles between women and men. Women are often associated with domestic activities and care that is responsible for meeting daily logistical needs, especially at the household level.
However, the economic condition of women in Indonesia in general is also problematic.
The existing gender construction is still an obstacle for women to fully contribute to the economic sector, so that the level of women's welfare is still below average.
Although the number of women and men of productive age is equally high at around 97 percent, only half of women are active in the labor market. In addition, women who enter the labor market dominate the informal sector with wages 20 percent lower than men (BPS, 2021).
Basically, this informal sector is an extension of women's main activities, the majority of which are in the domestic, service and care sectors which are often not considered to have economic value.
This is because the generalized definition of work is based on the masculine world associated with public spaces, rigid working hours, and the activities of male family heads.
So that women will always be trapped in the cycle of poverty. However, the construction of gender roles in a patriarchal society makes it seem as if women always have to deal directly with the issue of the price of basic necessities.
The problem is, when inflation occurs and the price of basic necessities rises, the VAT charged by the state will automatically increase. If the VAT is generalized, the poor will bear the most tax burden, including the majority are women.
In addition, the issue of tax neutrality also occurs if it is applied to women who have a need for maternity and maternity leave. During this time, women who are on maternity leave will get a pay cut.
If the income tax (PPH) is applied with the same calculation then women will be very disadvantaged.
Reproductive activity should not be seen as an obstacle for women to get their welfare rights. So, the proposal in this tax policy is to provide full salaries and tax incentives to women who are on maternity leave.
This mechanism can be interpreted as a form of state protection for women who are also the main citizens. In addition, the provision of tax incentives can be a safety net for women to avoid the risk of poverty.
The same is true for more specific issues such as gender-based violence (KBG). Tax policies with a gender perspective can be in the form of the right to restitution for victims of sexual violence.
Restitution aims to ensure justice for victims through the creation of complementary mechanisms to address the shortcomings of the existing justice system. For example, ensuring that the special needs of survivors are met. Restitution can also increase and allocate resources to reparations programs and other forms of redress.
This includes where the state or other party responsible for the violence is unwilling or unable to provide reparations.
Funds for restitution will contribute to the development of programs to be given directly to victims, as well as in advocating for human resources (law enforcers, counselors, community assistants) to assume responsibility.
Therefore, a fair taxation system will have a direct impact on gender equality.
If state revenues are optimal, and the management of public funds is carried out in a transparent and accountable manner, then the state has financial capacity that can be invested in building gender equality.
There are at least two approaches that countries can take to address gender equality; First, to tackle illicit financial flows, countries around the world will have the ability to adopt gender-based tax systems that can mitigate the adverse effects of market failures that explicitly or implicitly discriminate against women.
Second, G20 countries can adopt gender-responsive budgeting.
This is a capability that can enable countries to invest in health, education and social protection for women.
Those who work in the formal, informal sector or work in the care sector are unpaid. Happy Kartini's Day!
*) Herni Ramdlaningrum is Program Manager of The PRAKARSA & Co-chair C20, and Dr Desintha Dwi Asriani is Lecturer of Social and Political Sciences UGM & WG Gender C20.