BLANTYRE (MalawiTalk) – Cooking oil manufacturers say the increase of VAT on the commodity has triggered price increases and triggered the flooding of substandard cooking oil in the country.
The manufacturers have since formed an association to protect their interests.
The Edible Cooking Oil Association of Malawi (ECOAM) has since written the Ministry of Finance and MRA on the impact of the introduction of 16.5% VAT on cooking oil prices as well as Malawians.
Among others, they say the move has forced companies to increase prices of cooking oil which has resulted in an influx of substandard cooking oil on the local market entering into the country illegally due to porous borders.
According to the association, soya that is purchased from local farmers is VAT free-and currently government has imposed a 3% withholding tax which farmers are already refusing to be deducted.
The Association has since predicted that as the 3% withholding tax continues, Malawi farmers will sale their soya to buyers outside the country to fetch better prices denying the local oil industries whose total installed capacity to crush Soya is at 500,000 metric ton per annum.
With this, the industry says Malawi will lose out drastically not only by closure of local oil industry but forex generated from the products.