ZAMBIA – Various players in the edible oil industry are calling on Government to remove the 16 percent value added tax (VAT) on cooking oil to enable them to compete fairly against imported cheap edible products.
Currently, Zambia imports crude palm oil worth over US$70 million annually.
Crushers and Edible Oil Refiners Association (CEDORA) representative Dharmesh Patel argued that there is urgent need for Zambia to remove VAT on edible oil just like Zimbabwe, Tanzania, Mozambique, and South Africa, among others, have done.
Recently, the Malawian Revenue Authority removed the 16.5 percent VAT on cooking oil to boost local capacity.
Malawian Minister of Finance, Economic Planning and Development Goodall Gondwe explained that Government decided to remove VAT after receiving complaints and representation from the Malawi’s Cooking Oil Producers.
The producers explained that they were not able to compete with smuggled oil on account of the duty they pay.
“To check on smuggling and protect local industries, we are proposing exempting cooking oil from VAT,” Mr Gondwe said.
And a check by the Daily Mail found a huge influx of imported cooking oils alleged to have been smuggled into the country.
The brands include Pan Palm, Sunsstar, Golden Valley, Pam Olein, Dona, Ajwa, Peonu, Eco Fry, Quick Fry, and Eden Gold, among others.
The edible oil producers argued that smuggled brands are selling 16 percent less of the amount that local firms include on their products.
And the local traders say they are buying foreign cooking oil because it is affordable.
He explained that Zambian cooking oil is too expensive and sales are slow as compared to imported ones.
“Most of our customers prefer to buy the imported oils because they are cheap and we make a lot of money from it. We hear it is smuggled, but the price for us in business, it’s good,” Mr Patel noted.
September 10, 2017: Daily Mail