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Direct taxation: company taxation

Taxation policy can be used to encourage companies to invest more of their profits and give less of them out as dividends. Since the majority of those who own shares and would receive dividends are men, decreased dividends may improve gender inequality in incomes. Forms of increased investment that could reduce gender equalities, such as training women to take skilled jobs, should be encouraged.

As capital (wealth) increasingly moves globally there is a danger of a race to the bottom as governments compete to have the lowest rates of company taxation, leading to a serious reduction in governments’ ability to raise revenue. Tax havens that allow companies and individuals to pay little or no tax undermine the ability of other governments, particularly in poor countries, to collect company taxes. Curbing government attempts to get into such a race to the bottom and the elimination of tax havens are therefore important in ensuring governments collect adequate levels of revenue from company taxation. Such revenue is vital in promoting gender equality.

Corporate tax avoidance, especially through tax havens, worsens gender equality worldwide. It also makes other necessary legislation, such as on employment, safety regulation and on minimum wages, harder to implement. All these factors especially impact on women, who are often those employed at the lowest wages in export-oriented industries that are free to move to countries with less regulation, lower taxes and less social protection, weakening those workers’ bargaining power.