Mozambique: Businesses call for VAT exemptions, other measures to offset impact of stoppages – Watch

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Mozambique: Businesses call for VAT exemptions, other measures to offset impact of stoppages – Watch

2:59 CAT | 13 Nov 2024

Screen grab: DW

The Confederation of Economic Associations of Mozambique (CTA), Mozambique’s largest business association, asked the government this Tuesday (12-11) to exempt businesses from paying value added tax (VAT) on essential products to offset the impact of the demonstrations and stoppages that have so far lasted around 10 days.

“At a fiscal level, we propose the removal of VAT on oil, soaps and sugar, as well as chicken and eggs, which are basic products of most importance to the most disadvantaged groups,” CTA chairman Agostinho Vuma said at a press conference in Maputo.

Lower mandatory reserve rates and a tax moratorium

Vuma said that, in the list of recommendations to be submitted to the executive, businesspeople were also asking for a reduction in the mandatory reserve rates.

“In terms of monetary policy, we have proposed as a measure the continued reduction of the MIMO rate (monetary policy interest rate). As you know, the rate (of mandatory reserves) is at 39% and our proposal is for it to fall to 20% for the metical and 5% for the dollar,” Vuma added.

In its set of recommendations, the business sector is also asking the government for a tax moratorium, with deferral of deadlines for payment of tax obligations and exemption from payment of charges.

Mozambican businesspeople are also calling for the simplification and greater flexibility of audits after the unloading of products at the country’s main borders and ports, with a view to accelerating the operationalization of economic activities.

Vuma also said that businesspeople want the Mozambican government to waive fines for late payment of social security contributions.

“We want to propose more flexibility of expired deadlines for visa and authorization documentation in institutions such as the National Migration Service, as well as the reinforcement of the security of public and private assets,” Vuma declared.

Mozambique, and especially Maputo, the capital, has since October 21 seen strikes and demonstrations called by Venâncio Mondlane, who does not recognize the results of the general elections announced by the National Electoral Commission, which gave victory to Daniel Chapo and the Mozambique Liberation Front (Frelimo, the ruling party).

The demonstrations in Maputo left a trail of destruction, with deaths, injuries, arrests, infrastructure destroyed and commercial establishments looted, especially on 7 November.

Presidential candidate Venâncio Mondlane called for a new period of national demonstrations in Mozambique, lasting three days, starting on Wednesday, in all provincial capitals, to protest against the electoral process.

“We will demonstrate at the borders, at the ports and in all 11 provincial capitals (…) We will paralyze all activities so that people will understand that they are tired,” Venâncio Mondlane said in a live broadcast on his official Facebook account, concerning the “fourth stage” of protests against the general elections of October 9, which, he said, will have “several phases” – to be announced later – and which, he said, are also in protest against “kidnappings and hostage-taking” and “against the murder of the people”.

After street protests that paralyzed the country on October 21, 24 and 25, Mondlane called for a seven-day general strike starting October 31, with nationwide protests and a demonstration culminating in Maputo on Thursday, November 7. This resulted in chaos in the capital, with barricades erected, tires burned, and tear gas fired by the police throughout the day to disperse the protests.

Source: Lusa / DW Africa