Stotsky (1997) argues that tax systems can have differential implications for women and men because of the social and economic arrangements, social norms, and the gender differences in expenditures, employment, and property and financial asset ownership. Such gender-differentiated impact, which Stotsky calls implicit gender bias, is often found in the provisions for personal income tax, indirect taxes, corporate tax, informal taxes, and property taxes (Grown and Valodia 2010; Joshi et al. 2020; Lahey 2018; Stotsky 1997).<sup>1</sup> In order to overcome structural gender inequities and the disadvantages women face, Elson (2006) argues that tax systems should aim to transform existing gender-inequitable roles. Elson (2006) and Grown (2010) therefore propose that tax policies be evaluated on whether they reinforce and perpetuate gender inequities or whether they help to achieve gender equity. This study suggests that the rural land use fee or agricultural income tax should be assessed on whether it reduces or exacerbates gender inequities in agriculture and consumption and whether it is implicitly gender-biased.

# **2.2 The Rural Land Use Fee and Agricultural Income Tax**

The ten regional governments of Ethiopia have a constitutional mandate to set and collect the annual rural land use fee and agricultural income tax (Mengistu et al. 2017; World Bank 2012). These taxes are lump sum amounts, which are assessed on the total landholding area used for agriculture (Hill et al. 2017; World Bank 2012).<sup>2</sup> Land area is therefore a proxy for agricultural income.<sup>3</sup> The tax liabilities vary by region. Appendix 1 shows the tax schedules for Amhara, Oromia, and SNNP regions, which are the regions whose schedules we have access to. The total tax liabilities for Amhara, for example, are much larger than for SNNP. The taxes also vary within each region depending on the availability of irrigation (Oromia), whether the land was used for specific highvalue crops (SNNP), and whether it is a Productive Safety Net Program (PSNP) ward (Amhara) (Table 1). In the Afar Regional State, landholders are required to pay land tax according to whether they use the land for grazing or crop cultivation (ANRS 2009). In Benishangul Gumuz region, taxes are assessed on the area of land, fertility of land, weather, and suitable infrastructure (BGRS 2010). There is no tax exemption for smallholders.

**Table 1: Features of the Rural Land Use Fee and Agricultural Income Tax**

||**Amhara**|**Oromia**|**SNNP**|
|---|---|---|---|
|_Taxes are assessed based on:_|Total land area. Taxes are|Total land area. Taxes are|Total land area. Taxes are|
||lower for Productive Safety|higher for farmers who use|higher for banana, coffee,|
||Net Program (PSNP)<br>_kebeles_ (wards)|irrigation|chat, apple, and pepper<br>plantations|

_Source_ : Amhara Regional State, Proclamation (No.161/2001), Proclamation to Amend Rural Land Use Payment and Agricultural Income Tax of Oromia Regional State’s Proclamation (No.99/2005), SNNP Regional State, A Revised Proclamation to provide for rural land use fee and agricultural activities income tax (No. 122/2008).

The average per hectare tax rates for Amhara, Oromia, and SNNP regions (calculated from the tax schedules) are regressive; they generally decline the larger the total landholding (Figure 1). Farmers with less than 0.5 hectare pay more tax per hectare than farmers with more land. In Figure 3, we show that 65 percent of femaleonly and 58 percent of female-headed households hold less than 0.5 hectare of land compared to only 38 percent of male-headed and dual adult households, and therefore face the largest per hectare tax rate.

> 1 Explicit gender biases in tax systems arise when the letter of the law treats women and men differently (Stotsky 1997). There are no explicit gender biases in land taxation in Ethiopia.

> 2 In Oromia, taxes are assessed on the area of rural land held by farmers for agricultural activities, including cultivation, breeding of livestock, forestry development, and fish development (ORS 2005).

> 3 There is a livestock tax assessed on the number of livestock owned, but we do not include this in our analysis because the paper deals with land taxation.

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