Does Unequal Tax Burden Contribute to Women-Owned Businesses Leaving the Tax Net ?

Alemayehu Ambel and Firew Bekele Woldeyes

No 10712, Policy Research Working Paper Series from The World Bank

Abstract: This study investigates gender disparities in the tax burden in Addis Ababa, Ethiopia, using data on 2,320 taxpayers for 2011 and 2012. A quantile regression analysis is employed to control for firm characteristics such as sector, size, and age. The results show that women-owned businesses are more likely to operate in low-profit sectors and report lower sales and tax liabilities than men-owned businesses. However, women-owned businesses pay as much as men-owned businesses in taxes, suggesting that they are subject to a higher effective tax rate. This, in turn, may lead to women-owned businesses exiting the tax net at a higher rate. These findings suggest that gender disparities in tax compliance are not simply due to differences in firm characteristics but may also be due to biases in tax declaration and enforcement processes.

Date: 2024-02-27
New Economics Papers: this item is included in nep-ent, nep-iue and nep-pbe
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