‘Exempt tax on essential food items’

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THE Jesuit Centre for Theological Reflection (JCTR) has urged Government to zero-rate essential basic food items as way of addressing the high cost of living.

JCTR social conditions programme manager Daniel Mutale says Government should devise a comprehensive plan that clearly outlines both the short and long-term measures to address the rising cost of living.

In a statement, Mr Mutale said Government should address the cost of basic food items by considering measures such as extending the zero-rate policy beyond wheat and wheat products to other essential basic food items.

He said last year’s economic performance showed a mixed picture at macro and micro levels.
He said Zambia performed well at macro level with economic growth projected at just over seven percent and single-digit inflation closing at 7.3 percent in December.

He cited the bumper harvest in maize production during the 2011/12 farming season as one of the notable indicators of improved performed during the year.
“However, meaningful improvement in an economy should translate into corresponding improvements at individual and household levels,” he said.

Mr Mutale said meaningful improvement in the economy can be achieved through implementing measures that are structured and long-term in addressing the cost of basic needs.

He is however hopeful that 2013 will see meaningful improvement in the economy that should correspond at individual and household levels.

He said at the close of 2012, the basic needs basket for a family of five living in Lusaka stood at K3,532,100 (KR3, 532.10), recording the highest amount in the year.

“This shows a significant increase of K627,950 (KR627.95) in the cost of living compared to December 2011’s Basic Needs Basket of K2,904,150 (KR 2,904.15).

Of particular concern is the upward trend in the cost of basic food items as shown by K64, 550 (KR64.55) increase from K818, 750 (KR818.75) in December 2011 to K883, 300 (KR883.30) in December 2012,” he said.

Mr Mutale said the high cost of food items for December 2012 was but a reflection of the persistent high cost of basic needs which characterised 2012 especially the second half.

He said last year’s cost of living was high and unaffordable by the majority poor confirmed by sampling a few basic food items.
He cited the cost of mealie-meal that proved to be beyond the means of the majority poor that increased to around K60, 900 (KR60.90) in December 2012 from around K40,200 (KR40.20 in June 2012.

He however acknowledges several measures taken by the Government to curb the high cost of living including direct engagements with millers and off-loading more maize on the market.
“While these efforts are recommendable and will push the cost of respective basic food items downwards, there is need for more long-term measures to stabilise the overall cost of basic needs which may potentially shoot-up in the long-run,” he said.