Once again, it is that time of the year when the business community is awash with concern and anxiety as to whether this year’s budget reading will spell better returns for them or worse costs.
But this year, more than ever, the common man is also anxious to know whether the Government will use the budget to bring some relief to the already high cost of living.
This year’s budget reading comes at a time when the cost of living is skyrocketing with fuel and commodity prices seemingly on a race to the highest mark.
By the time last year’s budget was read, inflation had reduced from 13.9%, the previous financial year to 4.4% in May 2010. Unfortunately, it has shot up right back to 14.1% as at April 2011.
This obviously is making the best of us grit our teeth at the high prices. Consumers including the common man and the business community are feeling the brunt of escalating food and commodity prices and well as high transport costs because of the rising fuel prices.
It is a well-known fact that commodity prices are rising in most countries across the globe and the price of crude oil per barrel has also risen to date. This of course is not easily understood by the common man. All he wants to know is what the Government will do about it.
The next issue is what this year’s budget can offer in a bid to ease the common man’s pain. As earlier mentioned, rising commodity prices is currently a global phenomenon, but this year’s budget could consider a few of the options below. The PAYE thresholds have not been amended since 1997, yet the cost of living has been steadily rising since then. This year’s budget could increase the disposable income of those in employment by raising the threshold for payroll taxes.
Currently, the lower limit stands sh130,000. This could be adjusted upwards to say sh250,000. With rising commodity prices, a few extra hundreds of shillings to cater for the increased cost would definitely be welcomed.
Another thing that would make the common man happy is reduced fuel costs. The Government could look into either subsidising the cost of fuel or reducing the duties on fuel products. Subsidising the cost of fuel is expensive and not a very feasible option to be considered at this point in time. However, a reduction in fuel tax is possible although other alternatives to recover the lost revenue would have to be looked into. But even maintaining the cost of fuel at the current price would be a small consolation as long as it does not rise to the sh4,000-mark.
Those are just a few recommendations that would make the common man smile a little in this currently turbulent economy. Now let’s wait to see what the technocrats already have up their sleeves when the finance minister presents the budget speech.