Mozambique: IRPC facilities only for micro and small companies “because they are the ones that have most difficulty”

Login

Register

http://www.clubofmozambique.com/

Mozambique: IRPC facilities only for micro and small companies “because they are the ones that have most difficulty”

4:20 CAT | 14 May 2020

in file CoM

The Minister of Economy and Finance explained to @Verdade that the waiver of Payments on Account as well as the postponement of Special Payments on Account only benefit micro and small companies in Mozambique, “because they are the ones that have the most difficulty. We will not put banks, large companies and the extractive industry there”.

Customs and tax facilities have been put in place to mitigate the economic effects of Covid-19 on the Mozambican economy. In the fiscal aspect, the government has made an exception, until December 31, 2020, for “the offsetting of credits related to Value Added Tax (VAT), of which the taxpayer is a holder, with debts related to taxes of a different nature which are in charge of [due to be paid by] the tax administration”

However, the measures offering entrepreneurs most relieve are the exemption from “Payments on Account, which, pursuant to paragraph a) of paragraph 1 of article 27 of the Regulation of the IRPC Code, approved by Decree No. 9/2008, of 16 April, should be made in May, July and September”, and the “postponement of the Special Payment on Account, which, pursuant to paragraph 1 of article 29 of the Regulation of the IRPC Code, approved by Decree No. 9/2008, of April 16, should be made in three instalments, during the months of June, August and October 2020, for the months of January February and March 2021”.

Notwithstanding, Decree 23/2020, of 27 April, limits these facilities to taxable persons which have their tax status regularised and which have presented, in 2019, an annual turnover not exceeding 2.5 billion meticais. The measure is therefore meant only for the approximately 49,000 micro and small companies registered in Mozambique, which employ approximately 200,000 people.

Last week the Confederation of Economic Associations (CTA) made public its displeasure that these fiscal facilities did not extend to the entire private sector in Mozambique.

@Verdade asked the Minister of Economy and Finance why the income taxes facilities are only for micro and small companies.

“Because they are the ones that have the most difficulty. We are not going to put banks, big companies and the extractive industry there, we put those that actually have cash flow problems,” the minister said.

“If it were for all companies, see the profits that banks make, if they do not pay IRPC how does the state live? I don’t even know if society would understand,” Minister Adriano Maleiane said in a private interview with @Verdade in the Assembly of the Republic this Wednesday (13).

The Minister of Economy and Finance also revealed that these facilities would mean 2.5 billion meticais less in tax revenue.

@Verdade also learned that the exemption from Payments on Account “also applies to taxpayers with income in the second category, subject to the Personal Income Tax (IRPS), who were obliged to make these payments under the terms of no. 1 of article 33 of the Regulation approved by Decree no. 8/2008, of 16 April”.

By Aderito Caldeira

Source: A Verdade