The  Edible Cooking Oil Association of Malawi  (ECOAM) has penned the Ministry of Finance and MRA on the impact of the reintroduction of 16.5% VAT on cooking oil, stating that the development will see a retrenchment of workers and a price hike.

During a press conference at Amaryllis Hotel in Blantyre,  ECOAM chairperson, Jayshree Patel, outlined that by the end of this month, the retrenchment process will have begun.

On the other hand, the association claims that the VAT has reduced their sales by about 50%, as it is projected that between 30-35% of the workforce will be retrenched as a result of the drop in sales. “Our sales demand has dropped by 50 percent as customers are now flocking to the unsafe and cheap oil which is smuggled into the country.” he said, to the press, “Our expansion projects have been put on hold because prospects for the industry are bleak.”

In response to the letter by the association,  the Ministry of Finance refused to bow down. “Kindly note that the VAT cannot be reversed midway through the budget considering that the legal instruments were already passed by Parliament,” reads part of the letter signed by Secretary to the treasury, Chauncy Simwaka.