Cooking oil producing companies have affirmed their commitment to government that they will adjust cooking oil prices downwards owing to the remove of 16.5% Value Added Tax (VAT) as announced by the Minister of Finance during the 2022/2023 national budget presentation in parliament.
According to a statement released by the Ministry of Trade and Industry, the commitment was made when the ministry convened a meeting with the cooking oil producing companies in the country to chart the way forward on the prices and availability of cooking oil on the market following the removal of the VAT.
Reads part of the statement: “the objective of the interface meeting was to chart the way forward on the prices and availability of cooking oil on the market following the removal of 16.5% VAT on locally produced oil as well as well as imported cooking oil effective from 1st April, 2022 as announced by the Minister of Finance and Economic Affairs during the 2022/2023 budget presentation.”
The statement said the two parties observed and agreed that the move to remove the VAT will help in reducing production costs for cooking oil producers and, as such, local producers will be more competitive against companies from neighbouring countries where cooking oil is not subject to VAT.
The statement added that for transparency purposes, each company will report in writing to the Ministry the percentage of how much each company had reduced the price as part of the foregone revenue on input VAT claims from Malawi government through Malawi Revenue Authority (MRA).
THE Ministry has further warned that in the event that there is persistent escalation of cooking oil prices on the market, government will consider allowing more importation of the commodity to stabilize the prices.
“The Ministry will set up a platform that will be used for regular engagements and information sharing between the cooking oil industry, consumer association and the government in order to appreciate challenges within the sector for necessary policy intervention that benefit the consumer, the industry and government,” reads the statement.
The Ministry has also assured that government will continue regulating exports of raw soya beans under the Control of Goods Act in order to ensure adequate availability of the commodity to local processors for sustainable local value addition, job creation and reduction of imports of crude cooking oil.
