Edible oil producers in Zambia want exemption from the 16% Value Added Tax (VAT) to make local products competitive. “The industry is facing unfair competition from imported oil products and zero-rating VAT will help make the local industry competitive,” said Dharmesh Patel, executive of an edible oil manufacturing company.
Patel said Zambia is the only country in the region charging VAT on edible oil. Edible oils is an important part of food expenditure in Zambian households. The majority of oilseed growers are small-scale farmers with a poor resource base and who are prone to price shocks.
This year, the country’s production was 351 416 tons from last year’s 267 490. However, the price dropped from US$520 to US$400 per ton. This led to a poor uptake of raw material, with the demand-supply gap being filled through cheap imports.
The smuggling of edible oil into Zambia also negatively affects domestic producers and refiners.
Ministry of Commerce, Trade and Industry Permanent Secretary Kayula Siame said a proposal was submitted by her ministry to the treasury, to address the issue of making locally produced edible oils more competitive locally and regionally. “We are in talks with the Ministry of Finance to address the 16% VAT on edible oil,” Kayula said.
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