Mozambique: Tax collection up 17.6% in Q1 2018

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Mozambique: Tax collection up 17.6% in Q1 2018

11:40 CAT | 31 May 2018

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Mozambique’s tax revenues grew by 17.6 percent in the first quarter of this year compared to the same period in 2017, according to the budget execution report consulted today by Lusa.

Tax revenues rose from 36.7 to 43.1 billion meticais (from 521 to 612 million Euros), mainly thanks to income tax collection, which increased by 32 percent.

According to the report, corporate income tax (IRPC) revenue increased 57 percent to around 10 billion meticais (EUR 142 million) thanks to withholding taxes on contracting services, interest payments of commercial bank term deposits, and revenue from financial intermediation in the concession of credit for the construction of the Nacala railroad in the north of the country.

Personal income tax raised 8.4 billion meticais (EUR 119 million), 11.4 percent more than in 2017, as a result of the “constant control of withholding taxes and the amounts delivered to fiscal directorates”.

The quarterly execution excludes the sum of 21 billion meticais (EUR 298 million) from the sale of 25 percent of Mozambique’s natural gas exploration Area 4 by Eni to ExxonMobil – a transaction recorded in 2017, the document indicates.

In the first quarter of this year, Mozambique recorded a deficit of 9.6 billion meticais (EUR 136 million), 2 percent more than in the same period in 2017, financed with about 3 billion meticais (EUR 42 million) of internal credit.

The remaining 6.5 billion meticais (EUR 92 million) came from donations and external credits.

The budget execution report states that the activity of the quarter “was negatively influenced by the occurrence of abnormal rains in the northern and central regions of the country, negatively affecting the productive base of the agricultural sector, mainly in the northern part of the country”.

Source: Lusa