This paper brings together gender analysis, small scale enterprise analysis, and gender budget analysis in a development context 1 . The paper demonstrates that gender matters not only to the ownership of an SME, but also to its most likely principal activity, the stock of the assets that it possesses, the labour that it utilizes, the costs that it faces, the revenues that it generates, and the profits that it earns. In particular, lower earnings for female-owned SMEs can be attributed to the different input cost structures facing female and male-owned SMEs, which in turn are influenced by the indirect tax system. In this context, the paper identifies five gender biases in Vietnam’s VATsystem. These biases help explain the higher costs and lower profits of female-owned SMEs in Vietnam. This explanation is different from the more common explanation given for lower performance of female owned enterprises in developing countries,which is the gender segregation of sectors. Although this also plays a role, we argue that gender biases in costs and earnings, partly caused by the tax system, are the more dominant factor.