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KENYA BUDGET WE NEED TO BE REALISTIC

Budget: What a disappointment

Published on June 13, 2008, 12:00 am

By Gladys Makumi

In anticipation of this year’s Budget, I came up with a wish list, top among them being that taxation on fuel would reduce.

But this was not to be.

As much as the minister is eager to reduce inflationary pressure, he seems to have ignored the multiplier effect of fuel prices.

The prices of manufactured products are unlikely to decline, meaning that the mwananchi’s monthly spending will not change. As the cost of operating a business increases, it is inevitable that the consumer will to suffer more.

This means inflation is unlikely to get to the teens any time soon.

This is one of those years when we throw all rationale to the wind and think about the effects of the budget from a personal perspective.

This is mainly because the ordinary Kenyan’s household budget has increased by more than 30 per cent since last year, yet employers do not seem to be on a mission to relieve us.

The good news, however, is that VAT did not increase and neither did personal income tax, though I was hoping for wider tax brackets.

But this means we are still worse off than we were last year due to the high level of inflation.

We need to be realistic. This cannot be reversed overnight, meaning our belts will need to remain tightened for the rest of the year.

Optimism dictates that we look at the long-term effects of what Finance minister Amos Kimunya read today.

Unfortunately, ‘long-term’ does not apply to my current household budget and all I can do is hope that tomorrow will be a better day.

On a brighter note, maybe we could start having bread for breakfast again, with the zero-rating of VAT on the commodity.

Let us hope that the benefits provided to the manufacturers trickle down to the rest of us.

The writer is a manager with Deloitte & Touche and can be contacted on gmakumi@deloitte.co.ke The views expressed here are those of the author and not necessarily those of Deloitte & Touche.

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About SG

Secretary general of Chama Cha Mwananchi. This blog www.chamachamwananchi.wordpress.com, is based in Sweden.

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