João Mathombe points out several factors, among them the increase in the cost of raw materials by 371.5% for oils and 62.2% for soaps. Taking into account that, in the same period, the market prices of these products rose 68% and 33% respectively, one can conclude that this rise in raw material costs was not passed on in full to market prices.
As a result of the monitoring work done by CTA on the impact of the VAT exemption, and looking at all components, it can be seen that without the VAT exemption, the average consumer price of oil would be MZM 146.25 against the current MZM 125.00 in the market, with a clear benefit of MZM 21.25 per liter; in the soap component, it can be seen that the average price, without exemption, would be MZM 73.71 against the current MZM 63.00, a benefit estimated at MZM 10.71.
The benefits are also evident in the cost of the basic food basket estimated at MZM 3 469.39 against the MZM 4 059.18 that it would cost without the VAT exemption, which translates into a saving estimated at MZM 589.79 for the consumer.
“CTA, with its members, with emphasis on the Sugar, Edible Oil and Soap Industry, have been working with the Government to find medium and long term balanced solutions in order to guarantee the consolidation of local industry and regional and international competitiveness,” clarified João Mathombe,
For Mathombe, a price evaluation, without even taking into consideration the cost of the raw material as well as the production, may lead to unrealistic results.
