Government revises Judicial Costs Regulation in light of impact on entrepreneurs

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Government revises Judicial Costs Regulation in light of impact on entrepreneurs

7:36 CAT | 09 Aug 2021

File photo: Carta

The Ministries of Economy and Finance and of Justice, Constitutional and Religious Affairs have decided, through Ministerial Diploma No. 62/2021 of 16 July, to change the percentage of emoluments in cases not relating to personnel, under the provisions of article 32 of the Regulation on Costs in the Administrative Jurisdiction, approved by Decree No. 114/2020, of 31 December.

News of the change emerged in the newsletter of the Confederation of Economic Associations of Mozambique (CTA), to which ‘Carta’ has had access.

According to the publication, the decision follows the submission by the CTA of a letter to the government requesting the revision or cancellation of the fees contained in the new Costs Regulation in the Administrative Jurisdiction on the grounds that they were excessively onerous for businesspeople, and limited access to justice.

To illustrate the seriousness of the problem, the CTA letter offered two examples.

“Example 1: A Ministry Y that signs a contract with Construções X for the construction of a bridge, in the amount of 500,000,000.00 MT. Before December 31, 2020, (Revoked Decree) the amount for the fee (cost) would be 50,000.00 MT, but with the new Decree, the amount to be paid is 8,500,000.00 MT”.

“Example 2: Court Y signed a contract with the company XPTO for the supply of goods in the amount of 10,930,000.00 MT. Before December 31, 2020, the total amount to be paid would be 1,096.00 MT, but as per the new Decree, in force since December 2020, the total amount to be paid would be 185,810.00 MT”.

The CTA examples imply an increase of about 17,000% over the amount previously charged.

In face of the CTA protest, and in the midst of the pandemic, the Ministers of Economy and Finance and of Justice, Constitutional and Religious Affairs, determined as follows.

“Article 1. For the “Visa” in contracts of any nature or draft contract, will be paid, as emoluments, the following amounts:

a) 0.95% (per thousand) of the contract value, if it is up to five times that established annually in the Law that approves the State Budget, below which [value] contracts not related to personnel are exempt from prior inspection;

b) 0.88% (per thousand) of the contract value, if it is more than five times and up to 15 times the limit set by the Law approving the State Budget;

c) 0.70% (per thousand) of the contract value if it exceeds 15 times and up to 25 times (maximum) the limit value established in the Law that approves the State Budget.”

By Evaristo Chilingue

Source: Carta de Moçambique