Mozambican parliament approves new Customs tariff

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Mozambican parliament approves new Customs tariff

2:14 CAT | 24 Nov 2017

Diário de Moçambique

The Assembly of the Republic on Tuesday approved the proposal to amend Law 11/2016 of 30 December on the text of the Customs Tariff and its preliminary instructions, worsening or eliminating the exemption from import duties of products such as fish (horse mackerel), used or second-hand clothing and second-hand cars.

The proposal was rejected by Renamo and the Mozambique Democratic Movement (MDM) but passed on votes in favour by Frelimo, the majority parliamentary group.

This instrument establishes the customs duties and other charges levied on imported or exported products.

The document submitted to parliament by the Council of Ministers and presented by the Minister of Economy and Finance, Adriano Maleiane, eliminates the exemption from import duty of frozen mackerel, with a general rate of 20 per cent now being imposed on this product.

The minister explained that the application of the tax was not aimed at increasing state revenue, but at encouraging the consumption of domestic fish and imports of horse mackerel from countries in the SADC region.

Currently, 93.7 percent of horse mackerel imported comes from Angola, South Africa and Namibia, under the SADC protocol, which exempts this product. The remaining 6.3 percent are purchased outside the African continent, such as Japan.

“Irrespective of its origin, horse mackerel is exempt from VAT on importation and domestic sales, so as not to raise its price,” Minister Maleiane clarified.

Also Read: Government approves import duty hike for used cars – Mozambique

In the case of used clothing, the tariff will increase by 25 meticais per kilo, arising from the need to reactivate the textile industry in Mozambique, which at present suffers very low levels of production and investment.

“The Government considers that the importation of used clothing is a transitory measure, inserted in a special historical moment,” he said.

The rate, says Maleiane, is designed to stimulate investors to create national textile companies, promote the emergence of new industries, encourage the consumption of local raw materials, broaden the tax base and thereby increase revenue for the state and create new jobs.

Currently, the national textile industry is operating below 40 percent of capacity and the government’s intention is not to harm the citizen, but rather to boost national production.

As for the importation of second-hand vehicles over seven years old, the new tariff will apply a higher rate. The minimum value of the tax per unit of specific taxation for these vehicles varies from five to 350 thousand meticais, depending on the vehicle.
Vehicles under the age of seven saw rates reduced to five percent. The document presents this as an incentive towards vehicles with a maximum age of five years.

The taxes, which come into effect next year, also cover products such as Portland cement, whose import rate goes from 10.5 percent to 20 percent, but decreases from 20 to 7.5 percent materials used in the printing industry, such as plates, sheets, strips, blades, ribbons and films .

Beer based on cereals sees reduced rates

The new tariff reduces fees for beers produced from cereal, including corn, as a way of encouraging the use of local raw material in the national beer industry. Malt beer shall be readjusted with the incorporation of at least 50 per cent of local cereals or tubers and 30 per cent or more of malt; malt beer with the addition of at least 50 percent local corn and 25 percent or more malt and opaque beers without malt.

Reduced rates for new brewery undertakings are also foreseen for a period of three years after the start of the operation.

The question of the protection of domestic products does not begin with the measures adopted on Tuesday by parliament.

One recent debate over the protection of domestic production saw poultry farmers opt to slaughter of chicks as a result of imports, mainly from Brazil. The government limited imports to general satisfaction and without parliamentary criticism.

Source: Diário de Moçambique