The Centre for Democracy and Economic Development Initiatives (CDEDI) has given the Tonse Alliance-led government seven days to remove “punitive taxes” on essential goods and services or face nationwide protests.
Addressing journalists in Lilongwe today, CDEDI executive director Sylvester Namiwa said they were concerned with neglect of duty by the Tonse Alliance to protect and promote the well-being of Malawians, including the underprivileged communities.
Namiwa said introduction of punitive tax regimes that have ended up punishing the poor people through loss of jobs, increase of prices for basic goods and services are a clear indication that the incumbent government does not care about the welfare of its citizens.
“A recent example is the introduction of 16.5 percent Value Added Tax (VAT) on cooking oil, a development that has pushed up the cost of living, and has turned most poor people into scavengers,” said Namiwa.
He said average Malawians are finding it hard to afford locally produced cooking oil following the skyrocketing of prices.
Prices of cooking oils have risen by an average of 100 percent since Tonse took over power from the erstwhile Democratic Progressive Party (DPP).
Namiwa said it is for this reason that CDEDI is challenging all Malawians of good will to join a crusade to force the Tonse Alliance Government, under President Dr. Lazarus Chakwera, to start championing pro-poor policies in order to protect the marginalized from hazardous smuggled edible oils that have flooded the local market.
“CDEDI has been forced to take this route, after we’ve realized that government has shut the door on the poor people, if the admission by the Director of Revenue in the Ministry of Finance, Mr. Kenneth Matupa is anything to go by. During a virtual meeting that was held recently between CDEDI and the ministry, Mr. Matupa made it very clear that the ministry was aware that the introduction of VAT on cooking oil has pushed up the prices of cooking oil on the local market, and that this has in turn opened up a market for smuggled oil products, whose safety nobody can guarantee,” he said.
Namiwa disclosed that Matupa admitted that there have been lapses in containing smuggling in general, not only on cooking oil, but on various products because the malpractice is being perpetuated, in most cases, by the influx of foreign nationals that are living in Malawi illegally and are doing their illegal businesses in undesignated premises.
A recent study by the Mangochi District Health Office on food fortification revealed that most people are consuming foods that do not contain the required mineral and vitamins, by indicating that out of the eight cooking oil samples which were scrutinized, only one contained the required Vitamin A.
Namiwa said after analyzing the outcome of the meeting, CDEDI feels there is either general neglect of duties by some officers in the law enforcement agencies responsible for containing the influx of both illegal goods and immigrants into the country or the Tonse Alliance administration is deliberately introducing the punitive tax regimes in order to suffocate the local industry in an attempt to bring in their own preferred business interests,” said Namiwa.
“The latter can be true, looking at the recent closure of private companies such as the Kanengo Tobacco Processors Limited in Lilongwe, and the announcement by Bakhresa Group of Companies that they are closing their soap making plant in Mzuzu. It appears the plan by the Tonse administration is working out perfectly well, since no government official, not even the responsible ministers for Trade and Industry, has come out to make a statement on this very sad development about the closure of companies in the country,” he said.
Namiwa assured that as an advocacy institution on human rights, CDEDI remains committed to stand for the voiceless and that their call for the immediate removal of VAT on cooking oil is aimed at protecting the rights of the vulnerable and marginalized communities.
He reiterated that the introduction of tax on cooking oil has made the poor people even more miserable, and has posed a great threat to the survival of the local industry, which besides creating jobs, is also bringing in the much-needed foreign exchange through the sale of the soya cake, a byproduct of cooking oil from soya beans.
“For the records, from such exports, the country realizes a minimum of US$60 million annually, and the industry is providing permanent employment to 1, 600 people and 800 casual labourers. If the Tonse Alliance administration is really serious about uplifting the livelihood of poor Malawians, then let them start implementing policies that really resonate well with the local people, such as scrapping off the 16.5% VAT on cooking oil; a product that is commonly and mostly used by the local people in the villages for small scale businesses such as making mandasi, locally made cakes, kanyenya (kebabs),” said Namiwa.
“CDEDI is, therefore, giving the Tonse Alliance Government seven (7) days to scrap off VAT on cooking oil, and find other means of generating revenue from the local manufacturers; commence a review of its tax regime in order to revise all the taxes that are chocking the local industry and hitting hard on the ordinary Malawians, 80 percent of whom are living in rural areas and depend on subsistence farming. Should this demand land on deaf ears, which is mostly the case with the current Tonse Alliance administration, then CDEDI will be left with no choice but to mobilize all Malawians of good will to hold nationwide demonstrations, until such demands are adhered to,” he warned.