{"id":6717,"date":"2021-09-27T02:10:12","date_gmt":"2021-09-27T02:10:12","guid":{"rendered":"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government"},"modified":"2021-09-28T02:29:08","modified_gmt":"2021-09-28T02:29:08","slug":"cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government","title":{"rendered":"CAMA accuses edible cooking oil manufacturers of blackmailing consumers and Government"},"content":{"rendered":"

Africa-Press<\/a> – Malawi<\/a>. <\/strong><\/span>Consumers Association of Malawi (CAMA) describes as blackmail the continued attempt by refiners and producers of edible cooking oil in asking the government to remove the 16.5% value added tax (VAT), which government re-introduced last year.<\/p>\n

In a statement issued on Monday, CAMA says it has constantly condemned the continued blackmailing by the Edible Cooking Oil manufacturers in the country, \u201cwho are seeking unnecessary attention and sympathy from consumers and government\u201d.<\/p>\n

Earlier this year, the manufacturers attributed price increase of refined cooking oil to the reintroduction of VAT on the commodity \u2014 a justification which CAMA, in collaboration with Malawi Revenue Authority (MRA), later disputed.<\/p>\n

At a press conference held in April. CAMA executive director John Kapito had said according to their findings, the increase in the price of the commodity is due to many factors including increase in global prices of crude oil, and not VAT.<\/p>\n

At the press conference, which was also attended by representative of the cooking oil manufacturers association, Kapito said CAMA had successfully championed for government to remove VAT from cooking oil in 2015, with the anticipation that prices should go down for the rural masses to afford the commodity, which is enhanced with Vitamin A.<\/p>\n

\u201cBut within six month after VAT was removed in 2015, prices of the commodity still increased \u2014 which showed that other factors played a hand since most of the manufacturers actually just import crude oil and just refine it,\u201d Kapito had said.<\/p>\n

\u201cThe price increase should not be justified that it\u2019s coming from the VAT because if it was then it should have been at 1.6%. But here we see increase of 52% for Mulawe and 38% for Kukoma just for a 500 liter bottle.\u201d<\/p>\n

In Monday\u2019s press statement, Kapito says the manufacturers have for a long time preferred to import crude oil materials from the Eastern countries such as Malaysia and India and \u201calways at high prices than using local raw materials grown by our farmers\u201d.<\/p>\n

Just as he indicated in April at the press conference, Kapito further says Malawian farmers grow a lot of soya, groundnuts and sunflower used in the production of edible cooking oils but throughout the years they have failed to find markets for their produce.<\/p>\n

This, Kapito says, is because the local manufacturers opt to buy crude oil \u201cfrom their own countries of origin\u201d. \u201cThroughout the past years, Malawi was producing its own cooking oils using its own local raw materials,\u201d he said. \u201cWe all recall Uniliver or Lever Brothers used to produce COVO and Kazinga with linkages to our local farmers.<\/p>\n

\u201cThese were superior products produced locally and you may recall that the vernacular then for cooking oil was \u2018Mafuta a Mtedza\u2019 \u2014 meaning it is cooking oil produced from groundnuts. The full name of the acronym for COVO was Cooking Vegetable Oil \u2014 also from local agricultural raw materials.<\/p>\n

\u201cIt is shocking and surprising that today most of the cooking oil available on the market is dominantly imported from other countries. It is, therefore, shocking that today the Malawi Government would allow an Association of Cooking Oil Refiners\/Producers to import all their raw materials from their home countries and deny our local famers access to markets.\u201d<\/p>\n

Kapito says the manufacturers are demanding a number of tax incentives from Government \u201cfrom a product that has no added value to Malawians, especially farmers and consumers\u201d.<\/p>\n

\u201cCAMA has for a long time lobbied with Government to empower local Malawians linking them with local farmers to start producing local cooking oils. There is no magic science in the production of cooking oils that would require anybody coming from another planet.<\/p>\n

\u201cThe Cooking Oil Refiners are ransoming Government and consumers as if no one else apart from them can produce cooking oils in Malawi.<\/p>\n

Malawi has huge technical expertise supported by many graduates from our technical colleges and universities that can be empowered with resources to go into the production and create linkages with our farmers to start producing locally Malawian cooking oils.\u201d<\/p>\n

He concludes by saying the importation of crude oil \u201cis an abuse of scarce resources\u201d and CAMA appeals to the Ministries of Trade and Industry not to give crude oil import licenses to the existing cooking oil manufacturers.<\/p>\n

\u201cWe have also noted that both Ministries of Trade and Industry are some of the State captured institutions and are not in control of their mandates \u2014 hence compromised,\u201d he said.<\/p>\n

In their justification, the manufacturers had said they had to increase the price of the commodity because the global prices for crude oil they import went up and keeps fluctuating.<\/p>\n

They said this was the same trend in the neighbouring countries such as Mozambique and Zambia, whose prices are also similar to that in Malawi but with the introduction of VAT it means the prices had to go further up.<\/p>\n

In an exclusive interview in April, public relations manager for Capital Oil Refining Industries Limited (CORI), Violet Kapolo had given an example of Mozambique, which does not demand VAT on cooking oil and led unscrupulous to start smuggling the commodity and sell it in Malawi at lower prices than the local products.<\/p>\n

She had said the smuggled oil comes in bulk packages of 20litre buckets which local manufacturers sell most. Kapolo had said before VAT was re-introduced \u201ctraders weren\u2019t bringing in smuggled oil because the prices were the same with that of Mozambique, so it didn\u2019t make business sense to import\u201d.<\/p>\n

\u201cBut when we had to factor in VAT, it gave leeway for smugglers to make huge profits from the imported cooking oil and thus consumers opted to buy the smuggled product.\u201d<\/p>\n

But CAMA and MRA stood their ground, saying smuggling has always existed and that \u201cit has not increased because of VAT yet evidence of the illegal trade is awash on social media with pictures of traders offloading their cargo at Tsangano in Ntcheu and other entry points.<\/p>\n

Both Kapito and Kapoloma also firmly attributed to price increase because globally crude oil prices have also increased and thus they too had to follow suit.<\/p>\n

\u201cLet\u2019s agree here that VAT has nothing to do with the price increase,\u201d Kapito said at the press conference. \u201cThere are many factors and that include the global trends on crude oil which you have told us here.\u201d<\/p>\n

In his 2021 National Budget presentation in Parliament last September, Finance Minister Felix Mlusu had said cooking oil manufacturers need not raise prices of their commodities since tax measures will enable them to claim input VAT when one purchases goods or services liable to VAT.<\/p>\n

But when the manufacturers still increased the prices, they lobbied the Finance Minister through a letter dated September 14 to review or withdraw the VAT as it might trigger serious negative multiplier effects in the economy.<\/p>\n

Edible Cooking Oil Association of Malawi, a grouping of five manufacturers, had indicated that if the price of the products was to be incrased, it will allow room for massive smuggling of the product from neighboring Mozambique, Zambia and Zimbabwe where there is no VAT applied on it.<\/p>\n

Initially, CAMA had joined the condemnation of the tax measure believing it was indeed through the re-introduction of VAT until now when the consumer watchdog did its own analysis \u2014 in which it agreed with the Finance Minister.<\/p>\n

In his Budget presentation, Mlusu had said the introduction of the standard rate of 16.5% VAT was to ensure efficiency in the VAT system \u2014 taking cognizance that previously refined cooking oil was VAT exempt and manufacturers were not able to claim tax refunds on their input VAT.<\/p>\n

\u201cThis measure will now allow manufacturers to claim input VAT,\u201d he had said. \u201cI wish to inform this august House that local manufacturers of refined cooking oil continue to benefit under the Industrial Rebate Scheme where raw materials are imported without payment of duty.<\/p>\n

\u201cIn addition, under the Surcharge Tariff regime, the local manufacturers are protected from adverse competition. In this regard, arbitrary price increases especially by local manufacturers reflecting the full VAT adjustment on the refined cooking oil is not expected.\u201d<\/p>\n

According to Senior sources in MRA, when manufacturers buy their raw materials to produce the cooking oil, they pay VAT \u2014 \u201cwhich is their input VAT and when they sell their products they charge VAT \u2014 that is their output VAT.<\/p>\n

\u201cThe input VAT and the output VAT can only be netted off if there is VAT on the product. In that regard since there is claiming of the input VAT it does not become a cost to the manufacturer.<\/p>\n

\u201cPrices should, therefore, not have been affected in any way. In fact, they should have gone down.\u201d<\/p>\n

When asked that if the input VAT can be claimed, why then was it factored as a tax measure in the first place instead of just letting it as it was, our source contended that \u201cas a tax measure, it needed a change in the substantive VAT law and Parliament had to come in\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Malawi. Consumers Association of Malawi (CAMA) describes as blackmail the continued attempt by refiners and producers of edible cooking oil in asking the government to remove the 16.5% value added tax (VAT), which government re-introduced last year. In a statement issued on Monday, CAMA says it has constantly condemned the continued blackmailing by […]<\/p>\n","protected":false},"author":84,"featured_media":6716,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[233,371,2601,234,2600],"class_list":["post-6717","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-africa-press","tag-africa-press-malawi","tag-kapito","tag-malawi","tag-oil-manufacturers-association"],"yoast_head":"\nCAMA accuses edible cooking oil manufacturers of blackmailing consumers and Government - Malawi<\/title>\n<meta name=\"description\" content=\"Consumers Association of Malawi (CAMA) describes as blackmail the continued attempt by refiners and producers of edible ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CAMA accuses edible cooking oil manufacturers of blackmailing consumers and Government\" \/>\n<meta property=\"og:description\" content=\"Consumers Association of Malawi (CAMA) describes as blackmail the continued attempt by refiners and producers of edible ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government\" \/>\n<meta property=\"og:site_name\" content=\"Malawi\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2021-09-27T02:10:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-09-28T02:29:08+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/malawi\/sites\/36\/2021\/09\/img-61527dda6d8a5.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"720\" \/>\n\t<meta property=\"og:image:height\" content=\"491\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/malawi\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"CAMA accuses edible cooking oil manufacturers of blackmailing consumers and Government\",\"datePublished\":\"2021-09-27T02:10:12+00:00\",\"dateModified\":\"2021-09-28T02:29:08+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government\"},\"wordCount\":1498,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/malawi\/sites\/36\/2021\/09\/img-61527dda6d8a5.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Malawi\",\"Kapito\",\"Malawi\",\"oil manufacturers association\"],\"articleSection\":[\"all news\",\"economy\",\"homepage-english\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government\",\"url\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/cama-accuses-edible-cooking-oil-manufacturers-of-blackmailing-consumers-and-government\",\"name\":\"CAMA accuses edible cooking oil manufacturers of blackmailing consumers and Government - 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