The “pink tax” – does it exist in South Africa?

South African women face multiple financial challenges, not least of which is an entrenched gender pay gap. However, are they also paying a “pink tax”?

We explore what this is, and what other factors may constrain women’s finances.

Tip: Did you know that a tax-free investment attracts no tax on interest, dividends, and capital gains?

What is Pink Tax?

The pink tax is not a formal tax, but rather, it refers to the fact that women often pay more for “pink” (female) shelf items, including toiletries like soap, razors, face wash and other grooming products, as well as clothes and shoes. 

These costs add up and make life more expensive for women, says Adele Barnard, senior financial planner and investment specialist at Sanlam.

A cost comparison of random, off-the-shelf products, conducted in July 2023, suggests the “tax” designation is not without foundation.

The costs of men vs women hygiene products

Notwithstanding, this doesn’t mean retailers are intentionally inflating prices for women, says financial planner Sylvia Walker, author of Smartwoman: How to Gain Financial Independence and Create Wealth.

“There is ample choice when it comes to products, and women can select those that are cheaper, as well as decide how much to spend on grooming products,” she notes.

The argument that “pink” goods are taxed as luxury items begs the question – which items are necessities and which are luxuries?

Although the South African government zero-rated menstrual pads in 2018, VAT is still levied on tampons and menstrual cups – the latter of which are often used by lower-income consumers because they are reusable – along with other sanitary products.

How to circumvent Pink Tax

The following recommendations may help you to offset the pink tax effect.

Buy in bulk.

If your budget allows it, stockpile toiletries and sanitaryware. 

Shop around.

Compare shelf prices and hunt for specials at pharmacies and clinics. 

Buy what you can afford.

"If this means buying a man’s product, so be it,” says Walker, adding that women often choose certain products or brands because they buy into what society says makes us feminine and attractive as women.

Broader gender disparities

Of equal concern, the pink tax may indicate deeper structural issues around gender.

A 2022 study by The Borgen Project found that South Africa’s median gender pay gap is between 23% and 35% - exceeding the global average of 20%. Around 38% of homes are run by women, the study notes, and these are 40% poorer than households managed by men. 

In addition, there is a far greater tax burden on single-earner households. Given that 41.7% of children live with single mothers, as opposed to 4.4% living with single fathers, this is a further blow in the gender disparity issue.

Financial tips for women

Walker and Barnard offer some parting advice.

Educate yourself about finance.

Barnard says that women tend to be less confident when it comes to money, and possibly more fearful about their finances. “There is a shift, however – and I believe financially confident women will change the world!” she says.

Save a little every month.

“If a woman starts saving before she marries or has children, she gives herself a head start,” says Walker. “The odds are stacked against us in some respects, but starting to save early on can help.”

Tip: Investing in a retirement annuity helps reduce your tax burden and boost your retirement savings.