Time to cushion consumers – Business Daily

Editorials

Time to cushion consumers


Shoppers at a Nairobi supermarket. FILE PHOTO | NMG

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Summary

  • Prices of items like maize, cooking oil, fuel and cooking gas have been rising and are projected to climb further as a confluence of factors weigh in.
  • It would be prudent to identify the essential goods whose prices can be held constant or lowered through State intervention.
  • It is time to consider lowering, removing or temporarily suspending some taxes on food items, cooking gas and fuel.

The government should look into ways of cushioning consumers from the rising inflation, with a focus on mitigating price increases of essential goods.

Prices of items like maize, cooking oil, fuel and cooking gas have been rising and are projected to climb further as a confluence of factors weigh in, including the weakening of the shilling and the war between Russia and Ukraine.

It would be prudent to identify the essential goods whose prices can be held constant or lowered through State intervention. The government can use the tax policy to make a significant impact on prices.

It is time to consider lowering, removing or temporarily suspending some taxes on food items, cooking gas and fuel. Taxes make up a large part of the total cost of a wide range of consumer goods and foregoing some revenue to protect citizens from deprivation is a prudent strategy.

This should be a short-term measure which can be reversed once the factors driving the latest inflation surge have cooled off. It is also likely the most efficient and most equitable.

The government can also enhance its food relief distribution but it will be difficult to target all or most of those needing help.

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