MozParks opens new office in Maputo: Advancing sustainable industrial development in Mozambique
FILE - For illustration purposes only. [File photo: Lusa]
Mozambique’s government plans to broaden the tax base for value-added tax (VAT) in order to increase revenue collection, as set out in the Medium Term Fiscal Scenario (CFMP) approved by the executive.
According to the document, with the strategy for the period from 2025 to 2027, approved this month in cabinet and which Lusa has now seen, measures are needed “to strengthen public finances, promote sustainable and inclusive economic growth”, but also “ensure efficiency in the management of state resources.”
The “continuity of the effort to mobilise domestic revenue,” it states, includes broadening the VAT base, which in 2023 brought in 72,659 billion meticais (€1.061 billion) and which the government plans to raise to 105.032 billion meticais (€1.534 billion) in 2027.
“The continuation of this effort seeks to broaden the VAT tax base, which could result in an increase in domestic tax collection, contributing to an increase in tax revenue,” the document adds.
The government estimates that the tax measures set out in the CFMP will have an impact on revenue of 13.287 billion meticais (€194 million) in 2025, rising to 16.152 billion meticais (€236 million) in 2027.
It provides for the introduction of a reduced rate of 10% for Corporate Income Tax (IRPC) on agricultural, livestock, aquaculture and urban transport activities: “By stimulating the growth of these sectors and promoting economic development and job creation, it is expected that there will be an increase in economic activity and, consequently, an expansion in the tax base of these activities.
“This may result in an increase in the collection of corporate income taxes in these specific areas, contributing to an increase in tax revenue,” it continues.
Another measure cited is the “adjustment of the Harmonised System and incorporation of customs duties on goods and services that are no longer exempt from VAT,”,which “could result in an improvement in the efficiency of tax collection on imported goods and services, contributing to an increase in tax revenue.”
Also the implementation of the VAT regularisation mechanism in companies in the mining sector, to “increase tax compliance” in these activities, “which can result in greater collection of Value Added Tax, contributing to an increase in tax revenue.”
The document establishes measures “to combat tax evasion” – namely by “strengthening and intensifying audits, tax inspections and invoicing” in order to “increase efficiency in identifying and combating tax evasion, which may result in an increase in tax collection.”
It also intends to focus on “intensifying the inspection of the sealing of alcoholic beverages and manufactured tobacco” in order to “combat tax evasion on specific products, contributing to an increase in tax collection and the protection of public health.”
It provides for the “strengthening of tax administration systems to increase efficiency in tax collection and reduce tax evasion, which can result in an increase in tax collection, contributing to an increase in tax revenue”, and to complete the operationalisation of Private Tax Enforcement Courts in all the country’s provinces, in order to speed up the process of collecting tax debts, “guaranteeing greater effectiveness in the recovery of resources for the state.”
Another measure involves starting the process of enabling taxes to be paid via mobile channels, to “allow taxpayers to fulfil their tax obligations independently, without the need to go to the Collection Units.”
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