1 February 2013

Zambia: Millers Cut Flour Prices

MILLERS have reduced the prices of flour and other wheat products by 16 per cent following the Government's zero-rating of the products for Value Added Tax (VAT) purposes.

The Government zero-rated wheat and bread for VAT purposes effective January 1, 2013 as a way of reducing the prices of bread and other wheat products and reduce the cost of living for households.

"This is in order to reduce the cost of living for families as well as to promote domestic production of wheat and wheat products and enhance competitiveness," Finance Minister Alexander Chikwanda had said when he presented the Budget to Parliament on October 12 2012.

Millers Association of Zambia (MAZ) has said the members have passed on the benefits of the measure on wheat value chain to the consumers in the country by reducing the prices of flour.

The prices of bread and other wheat products have, however, remained high at retail outlets thereby not benefiting the intended beneficiaries of the measure.

MAZ chairperson Allan Sakala said in a statement in Lusaka that members had reduced prices of flour by an average of 16 per cent.

Mr Sakala said the association was encouraging consumers to ensure they bought products from the cheapest possible outlets, including its members' depots nearest to them.

He praised Government for the VAT zero-rating measure on the wheat value chain.

The survey conducted by a Times of Zambia showed that some bakeries had reduced the prices, while others had not.

Almost all bread traders, however, are selling the commodity at old prices, meaning the consumers were not benefiting from the measure.

And the Zambia Consumers Association (ZACA) executive secretary Muyunda Ililonga has challenged MAZ and the Bakers Association of Zambia (BAZ) to assist Government in actualising the measures on wheat value chain for the consumer to benefit.

Mr Ililonga said ZACA was saddened that some bakeries were still selling bread between KR5 and KR6 .

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