CAMA backs VAT on cooking oil

The Consumers Association of Malawi (CAMA) says the re-introduction of 16.5 percent Value Added Tax (VAT) on cooking oil was justified and has advised Government to ignore calls from manufacturers to remove the tax on the commodity.

This was disclosed during a press briefing which CAMA held on Wednesday 21st April 2021 at the College of Medicine in Blantyre.

CAMA Executive Director, John Kapito said the call by the cooking oil manufacturers is not valid because a study by the consumer rights body revealed that VAT was not the major factor which led to price hikes of the commodity.

“Unfortunately, the increase in prices of cooking oil on the market has more than doubled over the past few months since the re-introduction of VAT. However, the rise in prices has nothing to do with VAT. Data from various market inspections and monitoring surveys indicates that Government should not remove VAT on cooking oil because this has no connection with the rise in prices for the commodity,” Kapito said.

According to CAMA, the press briefing follows reports by some cooking oil manufacturers who had been misleading consumers that the rise in prices was due to the re-introduction of VAT on the commodity.

The association firmly emphasised that the oil manufacturers had been mobilizing the media, consumers and some Non-Governmental Organisations (NGO’s) including Parliament by providing false and misleading information regarding cooking oil prices, which they said is wrong.

Representing MRA, Head of Corporate Affairs Steven Kapoloma concurred with CAMA saying that the hike in prices for cooking oil does not in any way correlate with the re-introduction of VAT.

“There are various possible causes to the increase and one of them is that the cooking oil industry is taking advantage of the standard rate VAT to reap more profits.

“The industry has also deliberately increased prices of cooking oil more than necessary to encourage public outcry so that VAT is removed,” Kapoloma said.

He added that there are other factors such as increase in the cost of raw materials, which is driving up the selling price of cooking oil.

Apart from MRA, the press briefing was also attended by representatives from the Cooking Oil Manufacturers.

BY FUNSANI JOHN SCANDER