Mining sector and megaprojects’ contribution to Mozambique’s economy falls – Tax Authority

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Mining sector and megaprojects’ contribution to Mozambique’s economy falls – Tax Authority

1:22 CAT | 16 Aug 2018

Photo: O País

The Mozambican Tax Authority revealed on Tuesday that megaprojects, the mining industry and the oil industry contributed less revenue to the state’s coffers in the first half of the year than last year.

Although megaprojects are considered the bright hope for the recovery of the national economy, their US$6.9 million contribution was down 12 percent on taxes paid in the first half of last year.

The same happened with fuel, whose forecast half-yearly goal was of 8.9 million meticais, whereas collection in fact totalled 1.5 million meticais.

This figure indicates a level of performance of 32.72 percent, down 4.93 percent from the same period last year.

Meanwhile, the Mining and Surface Production Specific Tax was estimated at 3.5 million meticais, but achieved only 32.05 percent of that, 42.44 percent down on the same period in 2017.

The first half of 2018 was characterised by a fall in mining sector exports and, according to the Tax Authority, this was the main reason why the Specific Tax on Petroleum Activity did not reach the half-year target of around 600,000 meticais.

Another reason is that the National Hydrocarbons Company (ENH) replaced cash taxes with payment in kind.

AT makes positive balance

Despite these mineral resources constraints, the Tax Authority takes a positive view of tax collection in the first six months of this year, because the national economy has produced more than 105 billion meticais in taxes for the state, representing compliance of 100.75 percent with planned revenue.

The best is yet to come

The 2018 value of more than 222 billion meticais was determined as the minimum goal of tax collection for this year, but with less than five months to go to the year, the Tax Authority has only raised 47.52 percent of that .

This however does not worry Tax Authority spokesperson Fernando Tinga, for, after all, “the best performance is in the second half of the year and so the fact that we have reached this figure gives us encouragement that we will be able to reach the goal. There are clear signs in the months of July and August that we are on track.”

The Mozambican Tax Authority has also been visiting commercial establishments to inspect invoicing. These visits have revealed companies operating without a tax register, lack of interaction between business owners and accountants in the presentation of accounts and lack of leases of buildings where they operate.

Source: O País