Tax reform: Pink tax puts women back in the debate – 01/04/2023 – Market
Women are still in the minority in discussions about tax reform in the National Congress this year, despite paying more consumption tax than men and having participated in the elaboration of the proposals being debated today.
The Chamber’s working group that analyzes the issue was initially formed by 12 men. This week, the first female representative won, Congresswoman Tabata Amaral (PSB-SP). For the public hearings held by the collegiate in March, 48 men and only 7 women were invited. Only two deputies from outside the group attended the debates, Ana Paula Leão (PP-MG) and Amanda Gentil (PP-MA).
The current situation in Congress contrasts with female participation both in the preparation of proposals that are now in the Legislature and in discussions on the subject in recent years.
The tax reform is based on two proposals: PEC (Proposed Amendment to the Constitution) 45, with the participation of Vanessa Canado, coordinator of Insper’s Taxation Center and former special advisor to the Ministry of Economy; and PEC 110, subscribed by 54 senators and 11 senators, among them, the current Minister Simone Tebet (Planning).
Canado also participated in the discussions that led to the elaboration of proposals for the taxation of profits and dividends and the unification of the PIS/Cofins, themes that return to the debate this year, even if through other legislative proposals.
Initiatives such as the Women in Tax Brazil groups and the FGV Law School’s Taxation and Gender Center have also emerged in the last four years.
Women pay more taxes on income and consumption
A study by the Instituto de Justiça Fiscal with data from the Federal Revenue Service shows that women have less exempt income and, therefore, pay higher rates on their income. They also bear a greater burden in indirect taxes on consumption, 15.05%, higher than men (14.55%).
“The data relating to indirect taxes demonstrate, therefore, that the way the country taxes reinforces gender and class inequalities”, says the study by researchers Cristina Pereira Vieceli and Róber Iturriet Avila. They defend the reduction of taxes on basic items and on those consumed mainly by women, related to health, hygiene and personal care, in addition to taxing dividends.
Regarding consumption taxes, there are at least two issues. The first is the so-called pink rate: when products with the same functionality have higher prices when they are made in versions for women. Even if the taxation of the female and male product is the same in percentage terms, in the case of women, it will be levied on a larger base, explains lawyer Tatiana Del Giudice Cappa Chiaradia, partner at Candido Martins Advogados.
“Women, usually heads of families, work, take care of the house and children, mostly alone, bearing the economic burden that, proportionally, imposes heavier and more unequal taxation on them. Taxation increases proportionally to the increase in the base taxable. The greater the calculation base —the value of the economic movement that caused the taxation—, the greater the amount of the tax required on it.”
The study “Tax reform and gender inequality: contextualization and proposals”, by the Taxation and Gender study group at FGV, also showed that women spend a greater portion of their income on consumer goods, aimed at maintaining the family, and a part less of the income goes to investments and asset growth, such as real estate acquisition.
women in reform
Last week, the Chamber’s Women’s Secretariat promoted the debate “Tax reform from a gender perspective”, which took place at the same time as the working group hearing, in which 6 men and only 1 woman participated.
One of the topics in the debate mediated by deputy Denise Pessôa (PT-RS) was the adoption or not of rules that reduce taxation on goods and services most consumed by women, an issue defended, for example, by Tathiane Piscitelli, coordinator of the Law Center Tax at FGV Direito SP.
When diagnosing the problem, the special adviser to the Ministry of Finance, Fernanda Santiago, stated that Brazil has high taxation on consumption, mainly on products that are proportionally more consumed by people with lower incomes —part of the population with a large percentage of women black.
“We have a majority of black women, in single-parent families, who pay a higher percentage of their income to pay taxes on consumption,” he said. “It is essential that we manage to have a system that reduces regressivity so that they pay less.”
She said that among the proposals under discussion there is the possibility of adopting special regimes and different rates. A special rule for the health sector, for example, could benefit women more. The equalization of taxation of goods (more consumers by the poorest) and services (more consumed by the richest) and the redistribution of tax collection benefiting poorer states and municipalities are also factors that can mitigate inequalities.
There is also the idea of returning the tax paid to the poorest people, which the government has been calling “cashback”, another measure that can benefit women more.
Viagra, pads and condoms
Faced with the concern of other speakers about the end of the constitutional principle of essentiality, Santiago said that this concept has not yet guaranteed benefits for women. On the contrary, it contributed to a system that burdens this part of the population more. “Today we have the essentiality, and yet we tax unequally. It is not a dogma that will resolve anti-discrimination issues.”
Luiza Machado de Oliveira Menezes, from the Taxation and Gender study group at FGV Direito SP, presented a study that shows the high taxation of products consumed by women with PIS/Cofins, IPI and ICMS, such as sanitary pads (27.25%), collectors menstrual pads (33.75%) and birth control pills (30%). In comparison, there is less taxation for condoms (9.25%) and for viagra (18%).
“Despite what our Constitution says about the essentiality and the principle of tax selectivity, we have these disparities in taxation”, he said, when defending public policies for the distribution of some of these items, alongside the reduction of their taxation.
Ana Clara Ferrari, representative of the Ministry of Women, said that the debate on tax reform with a gender focus is something that interests most Brazilian families. “It is not a minority. We are a minority because we are not there in the WG [grupo de trabalho da Câmara] discussing it.”