Mozambique: CTA calls for special VAT regime for sugar, cooking oil, soap

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Mozambique: CTA calls for special VAT regime for sugar, cooking oil, soap

4:00 CAT | 30 Sep 2022

File photo: Lusa

The Confederation of Economic Associations of Mozambique (CTA), the country’s largest employers’ association, is advocating a special value-aded tax (VAT) regime for sugar, cooking oil and soap, taking into account the rising costs of these products.

“The ongoing assessment that has been launched includes the possibility of a special VAT scheme for the sector,” reads an analysis from the organisation consulted by Lusa.

The conclusion is the result of monitoring that the confederation has carried out to assess the impact of a VAT exemption that is currently in force for those products, noting that, to be more efficient for the consumer, the tax benefit should cover the entire economic circuit of the goods covered, also falling on the costs of importing raw materials.

“There are State institutions and legal mechanisms in place in the country that allow the government to have real control of raw material import costs,” the text reads.

The CTA points to the need for a strategy of gradual transition from the current tax benefits to a new regime, without distortions in the sugar, oil and soap market.

The employers’ organisation noted that the upward trend in food prices was a global phenomenon intensified by the Russia-Ukraine conflict.

Year-on-year inflation in Mozambique was 12.1 percent in August, the highest figure for the last four years and 11 months, the National Statistics Institute (INE) said.

The food, non-alcoholic beverages and transport sectors have contributed the most to the rise in prices in Mozambique.

Source: Lusa