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

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 regressionanalysis is employed to control for firm characteristics such as sector, size, andage. The results show that women-owned businesses are more likely to operate inlow-profit sectors and report lower sales and tax liabilities than men-owned businesses.However, women-owned businesses pay as much as men-owned businessesin taxes, suggesting that they are subject to a higher effective tax rate. This, inturn, 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 simplydue to differences in firm characteristics but may also be due to biases in taxdeclaration and enforcement processes. JEL Classification: H22 , J16