**Table 12. Hypothetical Tax Incidence**

||**Pan**<br>Household t|**el 1**<br>ax incidence<br>||**Pan**<br>Imputed ind<br>incide<br>|**el 2**<br>ividual tax<br>nce<br>||
|---|---|---|---|---|---|---|
|Expenditure<br>quartile|Male-headed|Female-<br>headed|Expenditure<br>quartile|Male<br>holders|Female<br>holders||
|Poorest|0.27|0.25|Poorest|0.77|0.75||
|2|0.16|0.21|2|0.40|0.38||
|3|0.11|0.13|3|0.28|0.27||
|Richest|0.08|0.09|Richest|0.16|0.16||
|Total tax|||Total tax||||
|incidence|0.18|0.18|incidence|0.42|0.41||
|_Number of_<br>_households_|_1,740_|_556_|_Number of_<br>_respondents_|_1,763_|_1,754_||
||**Pan**|**el 3**<sup>**a**</sup>|||**Panel 4**<sup>**b**</sup>||
||Household t|ax incidence||Hous<br>|ehold tax incid<br>Married|ence<br>Sinle|
|Expenditure<br>quartile|Dual adults|Female-only|Expenditure<br>quartile|Married<br>male-headed|<br>female-<br>headed|g<br>female-<br>headed|
|Poorest|0.27|0.26<sup>c</sup>|Poorest|0.27|0.25<sup>c</sup>|0.25|
|2|**0.15**|**0.25**<sup>**c**</sup>|2|**0.15**|na|**0.24**|
|3|0.11|0.14<sup>c</sup>|3|0.11|na|0.14<sup>c</sup>|
|Richest|0.08|0.07<sup>c</sup>|Richest|0.08|na|0.10<sup>c</sup>|
|Total tax<br>incidence|0.17|0.20|Total tax<br>incidence|0.17%|0.15%|0.2|
|_Number of_<br>_households_<br>_Notes_:The sample|_1,923_<br>is restricted to l|_303_<br>andholding household|_Number of_<br>_households_<br>s and respondents. Tax|_1,630_<br>incidence is calc|_153_<br>ulated by divid|_402_<br>ing by househo|

_Notes_ <u>: The sample is restricted to landholding households and respondents. Tax incidence is calculated by dividing by household</u> expenditures the imputed tax liabilities using land area and the hypothetical tax schedule in Table 11. Tests of equality of means were conducted between (1) male- and female-headed households, (2) male and female landholders, (3) dual-adult and female-only households, and (4) single female-headed and married male-headed households. Significant differences at p<0.05 are reflected in bold. a Male-adult-only households are excluded in this panel because of small sample size. b Single male-headed households are excluded in this panel because of small sample size.<sup>c</sup> The sample size is less than 100 observations. Household sampling weights are used.

# **5. Summary and Conclusion**

We present evidence of the gender implications of the tax incidence of the rural land use fee and agricultural income tax in Ethiopia. Close to 80 percent of landholding households and 84 percent of households with formal land rights pay these taxes. Rural landholders may view tax payment as a proxy for having a title to land to ensure continuation of their rights in an environment of tenure insecurity. The taxes are regressive, violating the vertical equity principle. Female-headed- and female-only households face a larger tax burden than their male counterparts, which violates the horizontal equity principle. These gender differences persist when we impute tax incidence with total land area and regional tax schedules. An area-based land tax is implicitly genderbiased because norms about women’s roles in agriculture, the structure of households, and the gender agricultural productivity gap result in higher tax burdens for women than for men. A more progressive perhectare tax schedule with exemptions for smallholders from paying agricultural income tax would reduce the tax burdens for women, but it would continue to be regressive.

We also found a substantial difference between self-reported tax payments and tax liabilities imputed based on land area and the tax schedules. The discrepancies in reported tax payments and estimated tax liabilities point to the importance of administrative tax data and land registries to complement survey data so as to ensure that 21