ONLY HUMAN – Cut tax to ease pain

IN THE LAST six weeks, Barbadians have been hit with price increases of key commodities which have escalated the already high cost of living and further eroded people’s disposable income.  
These price hikes include chicken and eggs which went up on Monday, March 14. Whole chicken and parts rose between two-and-a-half and five per cent, while eggs shot up between five and ten per cent. The range of prices relates to the various brands and sizes on the market. 
From midnight Sunday, the price of gasoline climbed by 21 cents, from $2.96 to $3.17 per litre. Diesel increased by 17 cents, from $2.62 per litre to $2.79 per litre, while kerosene rose to $1.93 per litre – an increase of 19 cents. 
These fuel price hikes will significantly impact the cost of freighting goods and services, motorists daily transportation costs’ and those who cook by kerosene. 
In other words, these prices will dig deeper into the pockets of the poorest among us, the average vehicle owner and businesses alike. 
Monday, the price of flour was increased by between 20 and 24 per cent. This will have implications for the price of bread, pastries and biscuits as flour is the essential ingredient in each of these.
We have already been warned of a price surge in locally produced pork, beef and lamb as producers of livestock have been grappling with paying more for feed – a result of increased prices on the international market. 
Andrew Bynoe, managing director and owner of Emerald City and Carlton A1 supermarkets, sounded this warning when it was revealed that chicken prices were rising. He noted then that some people would use a meat substitute such as corned beef. 
Since then, corned beef is not as plentiful and the price of quality brands has risen on supermarket shelves. This is due to the increased purchases of this commodity by the United States from Brazil as well as freight price increases because of higher global oil prices.
Put another way, Barbadians are paying more for these commodities due largely to external factors. As an import rich country, whatever happens in the major producing centres impacts us. 
For example, because of adverse weather conditions, prices of certain imported vegetables have increased here in the last six weeks. A five pound bag of imported carrots, for instance, that cost $15.99 at a certain retailer shot up to $18.99 in the last six weeks.
The public should, therefore, understand that the Government is not wholly responsible for the ever increasing prices of food items, in particular. As we can do little about these external factors, we need to manage the internal ones within our control. Here I speak specifically of the cost of fuel.
Government can ease the burden on motorists and businesses by restructuring the mechanism used to calculate the 50 per cent excise tax on gasoline, while allowing it to achieve the revenue target. 
With each increase in the price of gas above $2.44 per litre – the figure on which an additional $22.7 million to be raised in tax this year was calculated – Government is pulling in more VAT revenue than it budgeted for. In fact, gasoline costs 73 cents more per litre than when the policy was calculated.
Government should therefore set up a mechanism to reduced that tax to offset the increase in VAT which was not budgeted. This would immediately lower the cost of gasoline to the consumer as the taxes would be reduced even though the price of it has been increased. 
The Guyana government took this step less than a month ago on March 18. They slashed their excise tax by one third – from 30 per cent to 20 per cent to ensure consumers pay the lowest price possible in the prevailing circumstances.
Why can’t the Freundel Stuart-led regime do the same thing to ease Bajans’ pain? 
We all await an answer.