Malawi Parliament has passed Value Added Tax (VAT) Bill which removes VAT on selected items, including cooking oil, tap water and sanitary pads.
Speaking with reporters, Minister of Finance Sosten Gwengwe said Malawians should expect that come 1st April, VAT on the said items will be removed because it is for the benefit of the poor and not the companies which manufacture the product.
Gwengwe added that government is foregoing revenue so that people in the country can be cushioned hence it expects that the removal of the taxes will be passed on to consumers in terms of reduced prices.
When asked what will happen if traders will not comply with the law, Gwengwe said Ministry of Trade and Industry “has enough legal instruments to be able to address those that want to take advantage of Malawians.”
Commenting on the issue, former Minister of Finance Joseph Mwanamvekha commended government for removing VAT considering that the issue of cooking oil has affected almost everyone in the country more especially those who are in remote areas.
Mwanamvekha, however, asked the current leadership through the Reserve Bank to look at the inflation considering that inflation is going up of prices of goods and services so if it will be addressed as well as the issue of exchange rate, at the end of the day prices of goods will come down.
On her part, Spokesperson of United Democratic Front (UDF) Lilian Patel said Malawians want to see a change in prices of goods because their expectation is that things would be better if the prices are reduced“`