The main opposition Democratic Progressive Party (DPP) has expressed reservations on prospects of cooking oil prices going down.
The reservation follows passing of Value Added Tax (VAT) Amendment Bill by Parliament, which has, among other products, scrapped off VAT on cooking oil prices.
But commenting on the development, DPP Spokesperson on Finance Joseph Mwanamvekha said removing VAT on cooking oil alone cannot result in reduction of prices for the product.
He said: “He would have done better instead of just removing VAT he would have zerolated which means manufacturers don’t need to pay VAT when they produce a commodity.
But by just exempting VAT what it means is that the manufacturer will still be paying for the input whatever they are buying but they won’t be able reclaiming the same from the Malawi Revenue Authority (MRA).”
But responding to the displeasure, Minister of Finance and Economic Affairs Sosten Gwengwe said government still expects reduction of cooking oil prices by a minimum of 16.5 percent.
“The 16.5 percent VAT exemption from the cooking oil manufacturers is the minimum that government expects them to reduce the prices of cooking oil with,” Gwengwe said.
“Because 16.5 percent of VAT is foregone revenue on part of government side, it’s billions of money that government has said don’t bring it to MRA, but instead reduce the prices of your commodity for the benefit of poor Malawians.”
The Amendment Bill will also see consequently see the removal of duty and excise tax on sanitary pads as one way of supporting general feminine hygiene.
