Projects funded by international partners are now exempt from VAT in Mozambique

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Projects funded by international partners are now exempt from VAT in Mozambique

12:26 CAT | 15 May 2018

The purchase of goods and services for public projects financed by international partners will be exempt from value added tax (VAT), the Tax Authority of Mozambique has told Lusa.

Marcelo Mazivila, Taxation Director at the Tax Authority, said that VAT on the purchase of goods and services for state projects would be borne by the Government.

“This arrangement will mitigate a great constraint on the government, releasing resources allocated to VAT for the support of various projects,” Mazivila said.

Mazivila said the measure would soften the financial effort needed by companies involved in development projects, a burden that had previously made the operations of these entities more lengthy.

The decision results from the implementation of the Tax Mechanism for Regularisation of VAT on purchases of goods and services, in compliance with a decree approved in November 2017.

Beneficiary institutions would receive a certificate attesting to their eligibility, Mazivila said.

The measure, which the Japanese International Cooperation Agency assisted in the design of, would also help prevent tax evasion and fraud.

Source: Lusa