Balaka-based Cutrate Traders has supported the re-introduction of 16.5 percent value added tax (VAT on cooking oil but has urged authorities to curb smuggling of the product from Mozambique.
Minister of Trade Sosten Gwengwe admits that smuggling is a major threat to the local industry.
Smuggling is the illegal importation or exportation of goods subject to customs control.
Cutrate Traders acting general manager Austin Majawa, whose firm is a distributor of cooking oil in the Eastern Region, said since the introduction of VAT, cooking oil manufactures have raised prices of the product but about 30 percent resulting in them losing business.
He said this has compelled unscrupulous traders to buy cooking oil from Mozambique and smuggle it into the country through porous borders in the region.
“We used to buy a 200 litters drum of cooking oil at K18 000, but now the price has gone up to K200 000 and this is killing our business as people are no longer buying from us,” said Majawa.
He added that the problem is not necessary the re-introduced VAT but the inability by government to curb smuggling of cooking oil in the country, saying they are now stuck with drums of cooking oil as people prefer to buy cheap smuggled from Mozambique where there is no VAT on cooking oil.