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Pink Tax Causes Financial Pain

​​​​​​Pink Tax Causes Financial Pain

By Danelle van Heerde, 23 August 2018

Basic toiletries, grooming products, medical screenings and haircuts are some of the items that see women spending hundreds to thousands of rands more than their male counterparts.

A new survey conducted by leading financial services group Sanlam shows that whereas 93.4% of women claim to spend over R100 on monthly toiletries, only 76% of men do. Even in less expected categories such as medical screening and contraception, women are spending more.

Over 30% of women claim to spend over R1 500 per annum on medical screening whereas only 16% of men spend over R1 500 per annum. Contraception spend is also different: the majority of men at 56,4% spend nothing on contraceptives, whilst 51,2% of women purchase contraceptives monthly, with 30% of them spending over R100 a month. And sometimes there is a difference even when the service rendered is similar for both genders: 65% of women spend over R200 for a haircut compared to just 8% of men. Fair? Not really. And much of it comes down to a little known problem called pink tax.

Axe the Pink Tax

#Axethepinktax is a movement gaining global traction as increasing numbers of women object to paying more just because they’re women. A number of studies have investigated whether women ‘pay more for pink’, with cursory shelf comparisons between ladies’ and men’s razors and tees as an affirmative starting point. In light of Women’s Month, Sanlam commissioned Imagination Alliance research house to conduct a survey with a sample of 1000 (500 men, 500 women) to delve more deeply into pink tax in SA.

Danelle van Heerde, Head of Advice Processes at Sanlam Personal Finance says, “To drastically oversimplify the situation, women are generally earning less and paying more.” Code for Africa, a gender pay gap tool based on the World Economic Forum’s 2017 Gender Gap Report, found that South African men earn about R6 607.25 more than women monthly. This equates to the sixth largest pay gap in Africa. The research pins multiple factors behind this, including the fact that women tend to work in industries with lower average pay and have commitments like childcare.

“Now add to this the fact that women generally have to pay more than men for basic monthly necessities and one begins to perceive the full spectrum of challenges to women achieving financial independence,” says Van Heerde. One of the key findings from the survey was that 58% of men agree that women pay more for services and products that are targeted specifically at females. Both men and women believe there are things that they spend money on that the other gender doesn’t have to, but significantly more women agree with the statement: 87% of women vs. 59% of men.

Making a Difference

Interestingly, there’s still very little understanding of the concept of pink tax amongst both genders, although awareness is starting to grow, thanks largely to recent efforts to address the ‘tampon tax’. Currently, women are paying the same VAT for tampons and sanitary pads as they would for ‘luxury items’. This means these basic necessities suffered the same 15% VAT inflation as other ‘luxury items’ this year. Sadly, in 2016, UNESCO found that in sub-Saharan Africa, one in 10 girls misses school during her period. This information has spurred many businesses like Sanlam to engage in sanitary product drives to keep these girls in school. And it has prompted Stellenbosch University’s law clinic to ask Treasury to place feminine hygiene products on the list of zero-rated VAT items, to eliminate the tampon tax.

South African fitness guru, blogger and social media influencer Candice Bodington, partner to Sanlam in the #SanlamPinkTax campaign, says, “The results of the Sanlam survey shocked me. As a woman, I think we are aware that we are paying more, but not the full extent of it. There’s a feeling of outrage and exploitation that deeper knowledge of the pink tax inspires. “It makes you realise that although our society has come so far, there’s still a long way to go. Suffice to say I’m buying blue razors from now on. And I’m going to be using my influence in every way I can to make other women aware, plus the decision-makers who have the power to start to turn this around. Beginning with the tampon tax.”

Her sentiment is echoed by van Heerde, who says Sanlam will be using the survey information to create awareness and encourage women to make the best possible financial decisions in a challenging environment. She concludes, “For 100 years, we’ve been helping women to build wealth and achieve financial independence. A big part of this means understanding the unique challenges women face. Women also have a lot of purchasing power and a strong market impact. By providing as much awareness and sound financial guidance as possible, we hope to help women to navigate unique fiscal obstacles like pink tax via informed decision-making.”