The basic needs food basket rose by 40 percent in 2013 to about K70 000 (about $175) and the Centre for Social Concern (CfSC) has since recommended that the tax-free band should be increased to about K40 000 (about $100).
According to data released by CfSC last week, to meet basic food needs, a household of six in December 2013 required an average K68 000 in Lilongwe, K72 000 (about $180) in Zomba, K70 000 in Blantyre and K66 000 (about $165) in Mzuzu.
The CfSC basic needs basket (BNB)—a monthly review of prices of food and non-food basket—indicates that an average household living in the four cities required about K110 000 (about $275) in December 2013, a 30 percent jump compared to same month the year before.
CfSC social conditions research programme officer Alex Nkosi, in an interview, said the data shows how deeply entrenched poverty is in Malawi.
“CfSC is deeply concerned about soaring basic needs which characterised the year 2013 and its resultant impact on the lives of Malawians. The challenge of poverty reduction and improving living conditions is rooted in the realities of urbanisation and slow economic growth,” said Nkosi.
He recommended that to ensure households at least meet the basic food basket, the government must expand the tax-free band on Pay As You Earn (Paye) to K40 000 from the current K20 000 (about $50).
Explaining whether the increase in the tax-free band would not drastically reduce tax revenue, Nkosi argued that in light of the cashgate, government has enough resources.