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"We are being asked to subsidise [agriculture]. A small sector, the government and the private formal sector, to subsidise 70 percent of the population. Who will pay for it, and how it will be paid for?" the minister asked. [Photo: Aderito Caldeira / A Verdade]
Asked about a possible reintroduction in Mozambique of the tax benefit for agriculture in the IRPC [Corporate Income Tax], Minister Ragendra de Sousa said last Friday that it was not feasible to subsidise the sector. “Who will pay for it, and how will they pay for it?” he asked.
The Constitution of the Republic states that “agriculture is the basis of development” in Mozambique, but it is still one of the sectors receiving the least investment. Parallel to this, peasant farmers are incapable of accessing the few incentives available, and there are no tax benefits to attract entrepreneurs.
Among the few subsidies available, until 2016, was the reduced tax on profits from 32 to 10 percent in corporate income tax (IRPC). But, asked during the 6th Scientific Journey of the Tax Authority, the Minister of Industry and Commerce said that, “In agriculture, we are still debating the reduction of the IRPC”.
“We talk a lot about subsidies, take it from here put it in there,” Ragendra de Sousa added. “In the structure of our economy, 80 percent of the population is in agriculture. Our formal sector is already performing all possible somersaults and employs 1 to 1.5 million people. We number 30 million. How can 1 million subsidise 29 million? If you know the answer, please share it with me.”
“We are being asked to subsidise [agriculture]. A small sector, the government and the private formal sector, to subsidise 70 percent of the population. Who will pay for it, and how it will be paid for?” the minister asked.
By Adérito CaldeiraSource: A Verdade
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