By Watipaso Mzungu
The Malawi Revenue Authority (MRA) has alleged that the dramatic increase in prices for edible cooking oil is a result of collusion among the producers in the country.
But the Edible Cooking Oil Association of Malawi (ECOAM) has dismissed the allegation, further challenging the Authority to provide evidence for its claim.
A senior official at the Authority on Sunday called Nyasa Times expressing his disappointment with the way the local media is reporting on the contentious value added tax (VAT) on cooking oil.
The official, who sought anonymity, argued that contrary to the public view that the increase in prices of cooking oil was a result of the imposition of VAT on raw materials; the truth behind the hike is a collusion among the producers.
Collusion is a non-competitive, secret, and sometimes illegal agreement between rivals, which attempts to disrupt the market’s equilibrium.
The act of collusion involves people or companies, which would typically compete against one another, but who conspire to work together to gain an unfair market advantage.
“If you don’t trust me, ask yourself this question: Who owns these companies? Are they indigenous Malawians or Indians?” he asked.
“Again, if you can check, you will find that all of these Indian producers are related by blood,” he added.
But ECOAM Jayshree Patel rubbished the allegation, challenging that the Authority should provide proof of its claim.
Patel warned that perilous and tougher times await poor citizens if the government does not address their grievances.
“What they are saying is absolutely baseless! Why are they choosing to live in denial? In Mozambique and Zambia, they removed tax on cooking oil and their prices are very low and that is why they are exporting them into this country without any certification,” she said.
The Centre for Democracy and Economic Development Initiatives (CDEDI) executive director, Sylvester Namiwa, whose organization is mobilizing nationwide protests to force the government to scrap off the taxes, wondered why MRA was not acting on the companies it alleged to be involved in illegal trade practices.
“That’s a lame excuse and MRA is simply bringing this issue to divert the anger of the people towards innocent people. Let them remove VAT on cooking oil and all this storm will be over,” said Namiwa.
