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Cama blames ministry on cooking oil prices

Consumers Association of Malawi (Cama) has accused Ministry of Trade and Industry of failing to ensure traders’ compliance to the removal of 16.5 percent value added tax (VAT) on cooking oil to benefit consumers.

Kapito’s reaction follows a statement the Ministry of Trade and Industry issued at the weekend as a “final warning” to traders still charging higher prices on cooking oil.

A consumer checks the price of cooking oil in one of the retail shops in Blantyre

The statement reads in part: “Government expected that by now all the suppliers of edible cooking oil should have ceased and desisted from charging VAT on the said cooking oil as per the gazette notice issued by the Ministry of Finance.

“In view of the above, the Ministry of Trade and Industry wishes to issue a final warning to all perpetrators that through the laws, drastic action will be applicable to all traders that are not abiding by the said gazette notice.”

In the statement, the minister further called on the consumers to report all suppliers that have not yet reduced the prices to the Ministry of Trade for the ministry’s urgent action.

But in a written response on Monday, Malawi Oil Producers and Processors Association president Peter Ngoma said all manufacturers complied and effected price reductions. He said the statement should, therefore, be targeting traders.

Kapito wondered why the ministry cannot ask Malawi Revenue Authority (MRA) to prosecute the traders who are not complying with the amendment.

He said: “If the cooking oil industries are collecting VAT why can’t the ministry ask MRA to prosecute these traders, the ministry should not transfer their responsibility to helpless consumers.

“As a consumer organisation, we have was introduced on cooking oil and the ministry has refused to use our figures and consult on anything regarding prices of cooking oil. They seem to be clueless on what to do and are now begging for consumers’ sympathy on something beyond consumers’ control.”provided figures since VAT

Kapito feared there could be something big and worrying that the ministry is not disclosing.

However, Ministry of Trade and Industry spokesperson Mayeso Msokera indicated that they are taking the issue a step at a time.

“We had a discussion and we agreed on resolutions and that is when we issued a first public notice. The recent one is a final call which means that if we discover that there is still unfair trading then action will be taken. All the penalties to be enforced will be based on evidence,” he said.

In the 2022/23 National Budget Statement, Minister of Finance and Economic Affairs Sosten Gwengwe announced the removal of VAT on cooking oil as one way of making the commodity affordable.

But despite the removal of VAT, cooking oil prices remained high on the market.

Cooking oil manufacturers previously cited VAT as a contributing factor to the high prices, but Kapito is on record as having said that the companies were misleading Malawians by claiming that VAT triggered price increases.

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