Extractives: Discrepancies between tax revenue declared by AT and those in 2019 General State Account affect their “reliability” – Tribunal

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Extractives: Discrepancies between tax revenue declared by AT and those in 2019 General State Account affect their “reliability” – Tribunal

7:52 CAT | 25 Mar 2021

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File photo: Folha de Maputo

The Administrative Tribunal of Mozambique (AT) considers that “divergences” persist between the amounts of the tax contribution of the extractive industry declared by the Tax Authority (AT) and those contained in the General State Account (CGE) prepared by the executive.

“As in previous years, there are differences between the amounts registered in the CGE and those communicated by the Tax Authority,” the court says in its report and opinion on the 2019 CGE under debate this Wednesday and Thursday in the Assembly of the Republic.

The discrepancy “affects the reliability” of the amount of revenue declared by megaprojects in the 2019 CGE, Mozambique’s state auditor adds.

The discrepancies further violate the principles of “clarity, accuracy and simplicity”, thus hindering “the economic and financial analysis” of the declaration of “taxes paid by companies in the sectors of oil, gas and coal”.

In the table on “the degree of compliance with the recommendations”, the tribunal considers its recommendation to the government to follow the principles of “clarity, accuracy and simplicity” regarding the tax accounts of companies in the extractive sector as “not complied with”.

In the 2019 Opinion and Report on the CGE, the tribunal notes that the 10 companies in the gas, oil, energy and coal sector paid just over 19.7 billion meticais (€232.6 million) in taxes that year, equivalent to 7.2% of the total 2019 state revenue.

The amount that these companies disbursed in 2019 represented an increase of 5.3 billion meticais (€62.5 million) compared to 2018.

The CGE submitted to parliament by the government indicates that gross domestic product (GDP) grew by 2.2% in 2019. State revenue reached around 270 billion meticais (€3.2 billion) and expenditure exceeded just over 340.4 billion meticais (about €4 billion).

Source: Lusa