Ministry of Finance, Economic Planning and Development has urged consumers to engage the Consumers Association of Malawi and Competition and Fair Trading Commission to press local firms to cut prices for cooking oil and milk following the removal of Value Added Tax on the two commodities.
Government had introduced Value Added Tax (VAT) on wide-ranging commodities, like cooking oil, water and milk seven months ago, as a way of expanding the local revenue collection base before reversing the decision following complaints from Malawi’s cooking oil consumers on account of the VAT they pay.
However, there have been growing concerns from consumers on the reluctance by manufacturing firms to reduce the prices of the products that have been exempted from 16.5 percent VAT despite the call and announcements on the new measures by the tax collector Malawi Revenue Authority (MRA).
Ministry of Finance, Economic Planning and Development spokesperson Davis Sado on Monday said while the ministry’s mandate is to formulate tax policy, there are other competent bodies that monitor how this tax policy is being reflected in the consumer behaviour.
He said: “These [Cama and CFTC] need to be engaged so that consumers can benefit from the new tax measures on cooking oil and milk.”
Players in the manufacturing industry told Business News last month that they were yet to receive official communication from MRA on exemption of VAT on the two commodities.
MRA head of corporate affairs Steven Kapoloma urged Malawians and organisations such as CFTC and Cama to monitor prices of goods that have been affected with the new tax measures.