Malawi Government has removed Value Added Tax (VAT) on cooking oil and Minister of Finance Sosten Gwengwe says government expects the price of the commodity to go down.
Gwengwe made the statement at Parliament Building today as he was presenting the 2022 -2023 budget which has been put on 28 Trillion Kwacha.
Currently, one litre of Cooking Oil is sold at over K2500 while 2 litres is at K5000. The prices have risen sharply over the past yea as one litre of coooking oil was about K1000 in 2020.
In his speech, the Minister said that he held various meetings with players in the industry and a study was conducted by his Ministry to see how best they can assist the industry to ensure that the cost of cooking oil is affordable for all Malawians.
He added that the key contributing factor for the high cooking oil prices is the huge increase in prices of raw materials that are used for the production of cooking oil, most of which are imported.
“Regardless, Government has henceforth decided to exempt cooking oil from VAT. It is my belief that this gesture will be reciprocated by the cooking oil manufacturing companies by reducing cooking oil prices hence forth,” he said.
Apart from cooking oil, government has also removed VAT on tap water as one way of ensuring that potable water is accessible to all Malawians at affordable rates.
Government has further removed import duty and excise tax on solar lamps and solar fridges to support the use of alternative sources of energy, and in continuing to help rural masses that are off the national grid.
Another measure is the removal of duty and excise tax on sanitary pads as one way of supporting general feminine hygiene.
Withholding tax on gaming and gambling winnings has been reduced from 20 percent to 5 percent. Bet winnings that are K100,000 tax or less, will not be taxed. If a person wins K150,000, five percent withholding tax will apply on the additional 50,000.
The Value Added Tax (VAT), Income Tax, and the Administrative measures will be effective on 1st April 2022 once the relevant Bills have been passed by Parliament.