admin | Nov 7, 2022 | 0
Government Scraps Off VAT on Cooking Oil
Minister of Finance and Economic Affairs Sosten Gwengwe has on February 18, 2022 unmasked a 2.84 trillion Kwacha 2022/2023 national budget at Parliament building in Lilongwe.
The budget titled “Accelerating implementation towards wealth creation, job creation and food security” raised hopes and optimism among Malawians that this fiscal year’s national budget will help to address the economic challenges the country is going through. Hence, it was learnt with a sort of relief that the Value Added Tax (VAT) has been removed from some essential products such as cooking oil and tapped water.
In the budget presented amid Covid-19 pandemic, Finance Minister indicated also an increase of Constituency Development Fund (CDF) from forty 40 to 100 million Kwacha.
Gwengwe said CDF still remains crucial in as far as rural projects are concerned as it directly injects in standardization of projects.`
“CDF has a direct injection in rural projects. This will ensure standardization of projects such that construction to be
built under CDF will have the same design in all constituencies, as government we expect better development with the funds allocated,” he said.
But the presentation of the national budget drew mixed reactions from quarters of society with Center for Democracy Watch National Coordinator Levi Luwanga warning Malawians against celebrating the contents of the budget arguing that past experience has shown that most administrations hardly implement what they promise.
He said the Tonse administration led by President Lazarus Chakwera will have an uphill task to reduce the prices of
essential products such as cooking oil despite the removal of VAT.
“It will be a challenge to see the prices of cooking oil going down to the level where it was affordable before government imposed VAT on it. I do not understand why government introduced VAT on tapped water only to reverse its decision this year,” said Luwanga.
Luwanga further urged government to prevent the spillage of public resources, adding that this is key in creating wealth for all.
However, Consumers Association of Malawi (CAMA) Executive Director John Kapito told the press in an interview that it is encouraging to learn that government has decided to remove VAT on essential products as this will bring relief among Malawians, adding that he is looking forward to see reactions of the market.
In the budget, the education sector has a lion’s share of the National cake with an allocation of K462.24 million representing 4.1 percent. This year’s budget targets to help in achieving the Malawi 2063 vision.