Mining sector and gambling boost tax revenues in Mozambique

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Mining sector and gambling boost tax revenues in Mozambique

3:54 CAT | 04 May 2017

A Verdade / Mozambican tax Authority's Anibal Mbalango

Signs of recovery in the Mozambican economy were reflected in the collection of tax and customs revenues by the Tax Authority, which collected 39,654,960,082 meticais net during the first three months of 2017.

“We have had a very strong growth in the mining sector,” Deputy Director General of the Office of Planning Studies and International Cooperation Anibal Mbalango revealed. The positive performance was further influenced by “withholding taxes as a result of interest on term deposits and the increase of gamblers in games of chance”.

Speaking at a press conference yesterday, the director of the Tax Authority of Mozambique (ATM) explained that this tax collection represented 21.28 percent of the overall amount of state revenues determined for this year, which Is 186,333,498,064 meticais.

“This performance was influenced by withholding taxes as a result of interest on term deposits, increases in gambling and the rising price of coal and oil in international markets” Mbalango explained.

According to Mbalango, “there was strong growth in the mining sector of about 56.2 percent, compared to 16.28 percent in the same period [last year]”. Although the entire extractive sector had expanded, the coal sector predominated. “Indeed (coal) prices have made a major contribution to revenue collection,” Mbalango added.

In addition to the extractive industry, Mozambique’s four casinos and a slot machine room have paid more taxes. “What we have seen in this period is, on the one hand, an increase in gambling, and on the other, that the exchange rate remains favourable because these games are indexed to the dollar. It means that if we have more gamblers, the amounts are high and therefore the tax is also high,” Mbalango said.

Mbalango however noted some negative factors during the first quarter, such as “the reduction in consumption of goods as a result of rising import costs, and the lack of contracting services in the construction sector”, but nevertheless predicted that these revenues were “a good sign”.

“It means that if today was to the end of the year, we would have reached our goal,” Mbalango said, adding that at the same time last year, “we were at 20.57 percent and this year we are at 21.28 percent, almost one percent higher”.

During the same period, the Mozambican Tax Authority collected “around 25 million meticais from various seizures and about 41 million meticais are in the process of being collected”.

Among these seizures, “the highlight is vehicles, where the most frequent reasons for seizure are changes in characteristics, false registrations and vehicles imported with tax benefits”.

Source: A Verdade