A Staff Discussion Note (SDN) released by International Monetary Fund (IMF) has called for revision of tax policies by countries as a party of multi-pronged strategy to reduce gender-related income inequalities.

SDN captioned 'Catalyst for Change: Empowering Women and Tackling Income Inequality' suggests: "Reducing the tax burden for (predominantly female) secondary earners by replacing family taxation with individual taxation or other measures aimed at reducing marginal taxes on second earners more broadly can potentially generate large efficiency gains and improve aggregate labor market outcomes. Tax credits or benefits for low-wage earners can be used to stimulate labor force participation."

It adds: "A significant decrease in gender gaps will require work on many dimensions. Providing women with equal economic opportunities will require an integrated set of policies, including anti discrimination laws and the revision of tax policies."

It notes that Income inequality and gender-related inequality can interact through a number of channels. First, gender wage gaps directly contribute to income inequality. Furthermore, higher gaps in labor force participation rates between men and women are likely to result in inequality of earnings between sexes, thus reating

and exacerbating income inequality. Differences in economic outcomes may be a consequence of unequal opportunities and enabling conditions for men and women, and boys and girls.

As put by SDN, "The attainment of a more equitable society and narrowing gender differences are two issues that are drawing considerable attention from policymakers in a number of countries. There is also increasing recognition that the pursuit of these two objectives is not just desirable from a social equity perspective, but that it would have beneficial effects for the macro economy."

It points out that aspiring to equality of opportunities and removing the obstacles that prevent women from reaching their full economic participation would give them the option to become economically active should they so choose. Working toward gender equity and increasing female economic participation in turn are associated with higher growth, more favorable development outcomes, and lower income inequality.