Farmers challenge Tonse  to start championing pro-poor policies: Demand removal of punitive VAT on cooking oil

Smallholder farmers from Dowa and Mchinji have expressed disappointment with the delay by the Tonse Alliance-led government to start championing pro-poor policies.

Mkungula (centre) stressing a point during a press briefing in Lilongwe on Saturday morning–Photo by Watipaso Mzungu, Nyasa Times
Namiwa (in surgical facemask) addressing journalists while flanked by smallholder farmers and consumers–Photo by Watipaso Mzungu, Nyasa Times

Speaking at a press briefing in Lilongwe this morning, the concerned farmers pleaded with the government to remove value added tax (VAT) on cooking oil to save local cooking oil producers from closing their shops.

The Centre for Democracy and Economic Development Initiatives (CDEDI) facilitated the press briefing to provide the farmers and consumers a platform to voice their concerns on the flying prices of cooking oil as a result of the re-imposition of VAT on the edible cooking oil.

The Finance Minister Felix Mlusu, while presenting the 2020/2021 national budget, announced the introduction of 16.5 percent Value Added Tax (VAT) on cooking oil.

Stakeholders such as CDEDI and other economic and social commentators advised government to rescind its decision, but to no avail.

And contrary to Mlusu’s assurances that government’s decision would not affect prices for cooking oil on the local market, the prices have skyrocketed, with a price adjustment of almost 100 percent for all the locally manufactured oils.

This has paralyzed the market for the local cooking oil as consumers opt for the cheaper and uncertified oil imported from Mozambique and other countries.

This week, the local manufacturers have warned that they will be forced to lay off almost 50 percent of their workforce should the Malawi government fail to intervene on the matter, by swiftly moving in to scrap off the recently introduced VAT on cooking oil.

A farmer of soya beans from Traditional Authority Dzoole in Dowa, Blesssings Mkungula, feared the influx of foreign cooking oil on the local market will lead to the closure of the companies, which will negatively affect smallholder farmers.

“Where are we going to sell our soya beans and sunflower if these companies close shop? This government should have heeded calls from various stakeholders who cautioned the government against reintroducing VAT on cooking oil,” said Mkungula.

Zainab Mitole, a farmer from Mchinji, took a swipe at President Dr. Lazarus Chakwera’s government for failing to translate the Tonse promises into action.

Mitole said the Tonse government has demonstrated that it has no clue on how to deal with challenges that citizens are facing.

And in his remarks, CDEDI executive director Sylvester Namiwa said they had noted with shock on how the national assembly had skirted around the more pressing issues that are biting hard on the poor, such as some punitive tax policies, which the mid-year budget review session of parliament had smartly dodged.

Namiwa said CDEDI is being vindicated on its earlier warning that Malawians were sold a dummy in the name of the Tonse Alliance government, which cares less about the poor people, contrary to the alliance partners’ sugar-coated campaign promises that are hardly being fulfilled.

“Today, the average Malawians are failing to eat the promised decent three meals a day, simply because they cannot afford to buy cooking oil. Instead of creating the much touted 1 million jobs, there are gloomy faces of people on the streets who have either lost their jobs, or are hopelessly looking for a job. The local cooking oil manufacturers are slowly being pushed out of the market by some business people who are smuggling low quality and hazardous cooking oil into the country, at cheaper prices, thereby putting the lives of many Malawians in danger,” he said.

Namiwa said it is sad that the threats from the local cooking oil producers have come hot on the heels of the news about the closure of a tobacco processing firm in Lilongwe recently, thereby rendering hundreds of Malawians jobless!

“And to add salt to the injury, the Minister of Labour, Hon. Ken Kandodo shamelessly told Malawians that the Tonse Alliance government is unable to tell on whether or not the 1 million jobs are indeed being created. Should Malawians really expect a better Malawi anytime soon? Hon. Kandodo’s statement can easily be answered by the job losses the Tonse Alliance government is facilitating. The scaling down of cooking oil production has affected the prices of raw materials for the commodity, such as soya beans and sunflower due low demand from the manufacturers, thereby hitting very hard on the small-scale farmers who mostly rely on these cash crops for their livelihood,” he said.

The CDEDI boss challenged that if the Tonse Alliance administration is really serious about uplifting the livelihood of poor Malawians, then it should start implementing policies that really resonate well with the local people, such as scrapping off the 16.5 percent VAT on cooking oil.

“Otherwise CDEDI has left it up to all Malawians that mean well for this country, to be the best judges, especially now when they have been offered yet another opportunity to have their voices resoundingly heard this coming Tuesday, March 30, 2021 when they will be going to cast their votes during the bye-elections that are taking place in some parts of the country,” said Namiwa.

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2 years ago

Talk is cheap but kukwaniritsa is much a difficult in our country

2 years ago

Indeed government has to reconsidering. Cooking is very expensive and unaffordable at present.

2 years ago

This is not an issue of farmers but rather consumers. The problem is that the Amwenyez, who are using them, are overcharging their product and they want no tax to be put on it for that reason. In essence it will be like we are paying taxes to them and the government should not accept that. The Amwenyez should stop overcharging their product and everything will fall in its place. I argue the minister and government not to listen to them because even in other countries like SA where cooking oil is cheap there is tax associated with it.

2 years ago
Reply to  Phaloni

Which SA do you live in. Currently vegetable oil is zero rated.

Time for Truth
Time for Truth
2 years ago

Instead of charging VAT on cooking oil and other essentials the low paid and the poor can either barely afford the Minister off Finance should 1) Stop paying exorbitant rates of interest to suppliers of fertilisers, pharmaceuticals, school note foods etc. These traders supply on credit and then charge huge rates of interest. I challenge there Finance Minister to provide the total amount of interest government pays for fertiliser etc.
Stop inflicting suffering on poor Malawians. Also ensure that MRA collects taxes from the suppliers to government.

Last edited 2 years ago by Time for Truth
2 years ago

Cooking oil price has really gone high uo. Something need to be done as the kwacha is also not buying alot. Expectation from locals is that all labour rates shd go up yet ma salaries are the same small ones. Terrible indeed. If this goes on, the people wil always be angry and ruling angry pple is desastrous. I rest my case.

2 years ago

Vat on oil,vat on bread,vat on flour, these are basic commodities and people use these everyday, drop immigration fees on passports, and other services. Boost tourism by inviting investors to explore resorts in lake Malawi including,water world themes etc.

Rwandas largest income earner is tourism.. Let’s start thinking out of the box,local produced products are highly taxed, forget Cabaza’s and Minibuses and concentrate on buses,city line buses,encourage factories to boost the economy and create employment etc.

Ndafera Nkhande
Ndafera Nkhande
2 years ago

2025 wina adzava mdidi ndthu koma osadziwa icho chilithamanga.Anthu mmidzimu akuona zakudz chifukwa cha umphawi ndi njala.Maproject amene amalemba malebala sakuoneka mkomwe. Koma zinazi tidaziyamba dala.

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