Fiscal policy: how to spot and fix unintended effects on women

Fiscal measures pursued to raise revenue or improve efficiency can produce unequal outcomes for women and men, even when they are well-intended. Design features such as joint taxation, eligibility thresholds, or rules that overlook patterns of work and care can increase effective tax rates on women, restrict access to benefits, or weaken incentives to women’s labor market participation.

The World Bank’s Women, Business and the Law (WBL) project offers policymakers a practical way forward. The newly released policy research working paper, Mapping the Gender Dimension in Taxation and Budgeting: A Cross-Country Study of Laws, Policies and Practices, presents new data that can help governments analyze their fiscal systems to identify specific design features that may impact women, and apply straightforward reform options to achieve fiscal objectives without reinforcing inequality.
 

Fiscal Policy is Never Neutral for Women

Taxes and budgets influence incentives, redistribute income, and signal societal priorities. Yet the different effects on men and women are often overlooked, especially when the sole focus is on revenue mobilization or spending efficiency.

Until now, global efforts have largely examined these effects in isolation—focusing either on taxation or public spending. The WBL dataset bridges this gap by providing the first cross-country baseline on how fiscal systems affect men and women differently in taxation (81 economies) and how budgeting practices account for these differential impacts through “gender-responsive budgeting” (GRB) (50 economies). This dataset compares fiscal laws, regulations, and policy tools that embed commitments to equality. The new data align with the World Bank’s Gender Strategy 2024–2030, which recognizes fiscal systems as a powerful lever for advancing women’s economic opportunities and promoting social inclusion.

Economies vary widely. Some show strong, system-wide integration of considerations for women as well as men in both taxation and budgeting, while others advance on one side but lag on the other–revealing missed opportunities for alignment across fiscal tools. Closing these gaps is critical for promoting women’s economic participation and ensuring that fiscal systems actively support equality goals and inclusive growth.
 

Taxes: When “Neutral” Rules Aren’t Neutral

The WBL data examine how 81 economies integrate considerations for women and men across three dimensions of tax policy:

1. Filing rules: Joint versus individual filing shapes labor-market incentives. Evidence shows individual filing–common in OECD economies–supports women’s labor participation, especially when paired with childcare and flexible work policies. Still, Belgium and the Democratic Republic of Congo require joint filing, while Brazil and Norway allow taxpayers to choose.
   
   
2. Income tax provisions: Some tax codes include measures that support women, such as higher tax-free thresholds for women in Bangladesh or tax deductions for hiring women in Angola. Others embed unequal treatment. Male-default rules in Burkina Faso and Togo, for example, allocate dependent-related tax allowances and deductions to husbands by default.
   
   
3. Tax administration and reporting: Only 41 of 81 economies collect sex-disaggregated data during tax registration or filing, and none include analysis of differential impacts on women and men in tax expenditure reports. Without these data, governments cannot assess how tax credits, deductions, exemptions, or allowances affect them differently, or redesign policies to improve fairness and effectiveness (Figure 1).

Why it matters: Tax design has tangible effects on equity and efficiency. Moving toward individual filing, simplifying administration, and improving outreach to women entrepreneurs can enhance fairness, participation, and compliance, especially when paired with care and labor market reforms.

Budgeting: Does Public Spending Reflect Opportunities for Women?

On the public spending side, the WBL data examines four key dimensions:

1. Legal or policy frameworks: Laws and regulations help integrate practices into public finance that consider differential impacts on women and men, making it more resilient to political or economic changes. Out of 50 economies, 41 have such laws or policies (Figure 2).
   
   
2. Sex-disaggregated data: In twelve economies, including Chile, Guatemala, and the Republic of Korea, governments publish detailed, disaggregated program-level beneficiary data, improving transparency and accountability in public spending.
   
   
3. Impact assessments: Few governments systematically evaluate how spending affects women and men differently. Thirteen economies conduct such assessments, and five–Austria, Colombia, Republic of Korea, the Philippines, and Sweden–have legal requirements to undertake and publish them. The Republic of Korea applies them throughout the budget cycle.
   
   
4. Dedicated or tagged allocations: Forty-two economies earmark funds for women or girls. Examples include Albania and Kenya. Effectiveness depends on linking allocations to measurable results and national priorities.

Why it matters? Budgets reflect priorities. Embedding considerations for women and men across the budget cycle–supported by data, evaluation, and accountability–helps ensure that public spending advances equality and shared prosperity.

From Mapping to Impact: What Comes Next?

WBL mapping is a starting point–not the finish line. Translating legal frameworks into real-world impact requires tools that measure outcomes, such as tax-benefit incidence analysis, distributional evaluations, behavioral studies, and assessments of budget programs’ impacts on women and men. Integrated fiscal impact assessments–covering both revenue and spending–are essential to capture the net effects towards equality. Achieving this will require better sex-disaggregated data, robust household surveys, and stronger institutional capacity to feed evidence into policy cycles.

The WBL dataset gives economies a practical tool to benchmark progress and identify reform entry points. The next frontier is turning insights into action–ensuring fiscal systems advance equality rather than entrench disparities. This opens the door for collaboration across the World Bank Group, partner institutions, and national governments–shifting from isolated initiatives to systemic reforms grounded in data, evidence, and accountability.

^{The Women, Business and the Law team extends sincere gratitude to the Gates Foundation for generously supporting the data collection on tax and gender-responsive budgeting}.