Mozambique Elections: Simango promises to lower VAT and IRPS tax rates

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Mozambique Elections: Simango promises to lower VAT and IRPS tax rates

4:18 CAT | 20 Aug 2024

Photo: O País

Democratic Movement of Mozambique (MDM) presidential candidate Lutero Simango has promised to further reduce Value Added Tax (VAT), as well as Personal Income Tax (IRPS), if elected.

Speaking in an STV presidential candidate interview, Simango said that the reduction of these taxes would expand the country’s tax base. He acknowledged, however, that the impact would be negative in the first seven months, but said he believed the situation would improve after a year.

The reduction of VAT, the MDM presidential candidate said, would lower prices generally, and especially the price of liquid fuels. During the interview, Simango called the MDM a centre-right party, and therefore in favour of reducing tax burdens.

Simango argued that it was necessary to increase the populations purchasing power for products and services, thereby, in his opinion, encouraging greater circulation of goods and services in the economy.

Regarding corruption, the MDM candidate promised to put an end to what he called “10% commissions” required of companies to access public tenders. If corruption was put an end to, no one would be asked for “refresco” in exchange for providing public services or their freedom, and everyone would pay taxes, he said.

Simango said that, if elected, one of his governing goals would be the transformation of informal activities into formal ones. For Simango, the most worrying aspect is not the informal sector linked to the common population, but that linked to mineral resources.

Simango said that his party had already denounced, in the Assembly of the Republic, the existence of companies that exploit resources, such as timber, minerals, fishing grounds and others, and export the produce illegally.
Another of Simango’s plans is to depoliticize the state. Lutero Simango said he would not allow party cells in public institutions, and promised to create a law to depoliticize the state and create paths for fair career advancement.

In Simango’s opinion, it is not clear why, up until now, only 9% of the population pays taxes. He believes that the ideal would be for at least 65% of the population to work in the formal sector.

The MDM presidential candidate also commented on the salary reform introduced by the government through the Single Salary Table. Simango promised to maintain the salaries that benefit citizens at the same level and correct any problems if he becomes president.

Source: O País