There’s already a pay gap and an opportunity gap that women suffer from, but did you know that you also pay something called pink tax? And no, there is no blue tax for men.

What is pink tax and are you paying it?

Open your closet and go through the clothes you own. Irrespective of whether it’s dresses, kurtis, or jeans – and irrespective of the brand – you’ll hardly find any with real, functional pockets. 

Have you ever wondered why most clothes for women do not come with pockets? Some say it’s because bulging pockets ruin the female silhouette and fashion is more important than function. Others say it has a historical significance that harkens back to gender inequality.

But if you look at the number of bags women have – purses, sling bags, clutches, totes, and wristlets – you’ll probably arrive at the most plausible answer. If women’s clothing had pockets, how would the handbag industry thrive? That’s one of the many examples of pink tax.

Related: How much taxes do women-centric products attract?

What is pink tax?

The pink tax is not an official tax; don’t let the term confuse you. It is, however, the invisible cost that women pay for products and services designed and marketed to them specifically. This can be in two forms – one, like the above example where women pay a lot for something men hardly even use; and two, paying more for products for which men pay less. 

A classic example is personal care items like razors and deodorants. Look at any popular brand in the country, and a quick price comparison will reveal that they offer the female version of the same product at a significantly higher price than the male variant. 

Why does pink tax exist?

Your first reaction would be that it’s unfair. Next, you would be wondering why this is so. Since pink tax is not official or evident, there’s no one single reason. 

Many in the fashion and beauty industry would say that women are willing to pay more than men for certain things because they care more about their appearance and are more fashion-conscious than men. Another reason could be the packaging. It’s no secret that most women love attractive and aesthetic packaging, whether it’s for make-up or stationery. 

It’s also believed that women are less price-elastic than men, which means that they won’t let a slight change in the price of a product make them switch to another brand. Women tend to be more brand loyal and value the experience more than just the cost benefit. 

It could be a combination of the above reasons, but most companies know that when women are their target consumers, they can effectively position, brand, and sell their products and services at a higher price than if men were their target consumers. 

Related: New tax regime vs old tax regime: Should you switch?

How much pink tax am I paying?

It is estimated that as a woman, you're paying about $1300 more yearly than men for basically the same products and services. That’s almost Rs 1 lakh! Imagine everything you could do with that instead – from investing to planning a vacation.

A study conducted by the Department of Consumer Affairs in New York compared the prices of over 800 products and found that products for women cost 7% more than the same products for men. This discrepancy is greater in certain product categories. For instance, it’s 13% in personal care products.

Is there a way to avoid or reduce pink tax?

While it may not be possible to completely avoid pink tax, you can certainly take some steps to reduce it. 

  • Try out the male equivalents of certain products where there really is no differentiation in the actual composition or purpose of the product, such as deodorants. 
  • Be mindful while shopping. Compare products and see whether they are overpriced. Switch to another brand if you have to. 
  • Be more aware of marketing. The next time you see advertisements, whether on TV or social media, try to think whether they have a hook specifically to lure women and play on their emotions. 

Related: Incomes that will be tax-free under the new tax structure

As cute as ‘pink tax’ sounds, it’s anything but. It’s unethical, unfair and unnecessary. Women already bear a lot of expenses that men don’t, from sanitary napkins to tampons to maternity costs. Those are unavoidable because of the female anatomy, but these other products that come with a pink tax are just marketing gimmicks of a capitalistic world. 

Now that you’re aware of pink tax, you can dodge it better. Make sure your girlfriends know about it as well! Are you saving as much tax as you can? Find out now!