A heavy burden...

The recently imposed 10 % surtax has been touted as a very mild instrument that has been carefully devised for minimal impact on the consumer price index. If only that were the case.
Unless one is in the market for large investment inputs, prescription medicines, or perhaps a communication satellite (no kidding!), the surtax is bad news for an already pinched public pocket.
It is a measure that will make the increasingly infrequent shopping trips even more painful. By what factor the new, albeit temporary surtax will multiply the rampaging inflation rate is to be left for economists to figure out, but to the average person, it is already being felt across the board.
The first week of April, a kilogram of nails was selling for around birr nine. After the new tax imposition – builders are paying up to birr 12 for the same nails. This hike, ostensibly to set off a 10% surtax, may become it is feared, accepted business practice by greedy traders who are secretly delighted when ever prices rise either because of a fuel product price adjustment or taxes that sneak up on us out of the blue.
The avarice of profiteering business persons and a system that seems to allow them to continue bleeding the public dry is an entirely different subject and one on which much can and will be said.
The core of the current issue is simply the unsustainability of every day life if the price of such mundane items can shoot up so drastically. …Well then, now we can start believing the incredible reports of 2200% annual inflation in Zimbabwe. Are we heading south?
The surtax, we have been informed, is to pay for the 1.5 m qt of subsidized wheat that the administration is releasing on the market to relieve the pressure on teff prices. This is difficult to ingest...but if it could somehow be made logical, then so would be the idea of burning the bed to brew afternoon tea.
This surtax, dear leaders and readers; is the last thing the Ethiopian economy needs. It will dilute even more the hard won and internationally recognized development momentum achieved by pro-business economic policies, which included incentives, minimum red tape and other economically astute measures taken by the administration-the same one that is shooting itself in the foot by imposing this new tax burden.
So currently, prices on virtually all commodities have risen yet another notch. It is difficult to rationalize this latest obstacle to affordable living as it comes on top of the most financially challenging era in recent Ethiopian history.
It has repeatedly been maintained that the surtax will not affect the livelihood of the poor but this is either wishful thinking or simply poor economics. We live in a country where even the faintest rumor of any kind of tax will spur a panic among traders and consumers. There are indications already of hoarding among the former.
The surtax is imposed on all imported goods excluding investment inputs, prescriptive medicines, fuel oil, lubricants, and industrial raw materials. Even so, the fact is that nearly all other consumer items utilized in our country are imports so prices will inevitably impact on the urban poor and the struggling middle classes.
Granted the government has monumental expenses in light of the current tinderbox situation in and around the horn. Yes, ensuring security is a difficult, non-stop task that requires huge resources. We may even apply a sort of nationalistic discretion and perhaps grudgingly support the added tax burden as a necessity of the times.
However, a low wage economy can only take so much from its suffering masses without running the risk of total financial meltdown.