Mozambique: Tax dispute with Galp a matter of ‘sovereignty’ – businesses

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Mozambique: Tax dispute with Galp a matter of ‘sovereignty’ – businesses

12:36 CAT | 13 Nov 2025

Photo: Ministério da Economia

Mozambican business leaders on Wednesday considered Mozambique’s demand that Portuguese energy group, Galp, pay €151.5 million in taxes on the sale of its stake in a gas project to be a matter of “sovereignty,” but called for dialogue between the parties.

It is an issue that, for us, we consider to be one of sovereignty. Because, looking naturally at what is established by legislation and other legal provisions, the sale of a given asset gives rise to capital gains, now, as to the calculation mechanism, to the parties, we encourage them to sit down and understand to what extent what has been paid or will be paid corresponds to the expectations within the legislation,” said the vice-president of the Confederation of Economic Associations of Mozambique (CTA), Onório Manuel.

Speaking to Lusa on the sidelines of the 20th Annual Private Sector Conference (CASP), which kicked off today in Maputo, he called for dialogue between the parties, stressing that the private sector must comply with its tax obligations so that the state can guarantee a healthy business environment.

“In fact, we believe that this is not a complex case in its entirety, because it has a legal basis, it is just a matter of agreeing on figures, and we at CTA encourage Galp and the government to sit down, and should there be capital gains, it is fair, it has to be that way,” said the CTA official, insisting on dialogue.

“As CTA, we have been encouraging the private sector to appreciate the benefits granted by the country and the government, but they also have an increased responsibility to contribute, to return what is tax to the state, because it is on this basis that the state will guarantee the conditions for GALP and others to have an adequate business environment,” added Onório Manuel.

On 27 October, Galp said that there is no legal basis for the Mozambican tax authorities to claim €151.5 million from the sale of its stake in a gas project and that it is “very committed” to finding a solution with the government.

“We believe that there is no legal basis for this complaint, […] we are very, very committed to finding a solution with the Mozambican government,” said Galp’s executive co-chairman João Diogo Silva on that day, in a teleconference with analysts on the company’s third quarter results.

Lusa reported on 8 October that the Mozambican Tax Authority (AT) is claiming US$175.9 million (€151.5 million) from Galp in connection with the sale of the oil company’s stake in a gas project, warning that the figure “may rise” and that enforcement proceedings are underway.

When asked about this dispute, co-chief executives Maria João Carioca and João Diogo Silva emphasised that Galp respects its institutional obligations and is following the due course of law.

“Galp has been in Mozambique for over 65 years, we are very, very, very present in the downstream business [final stages of the production chain up to sale at petrol stations], it is a country we totally respect,” said João Diogo Silva.

At issue is the tax dispute that followed the conclusion of the sale last March of Galp’s 10% stake to the United Arab Emirates state oil company (ADNOC) in Area 4 of the Rovuma Basin, in the north of the country, which produces natural gas, in a deal worth around US$950 million (€819 million).

Galp had previously announced that it had formally taken the first step to resolve the dispute with the Mozambique tax authorities in an international arbitration court.

The Mozambique government had previously stated that there were no negotiations with Galp on the case relating to the amount of capital gains tax, although it believed in the “common sense” of the Portuguese oil company.

Galp posted a profit of €973 million in the first nine months of the year, up 9% on the same period in 2024, with a “record” €407 million in the third quarter (+53%).

Source: Lusa