Mozambique to tighten tax system in 2025, seek 200,000 new taxpayers

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Mozambique to tighten tax system in 2025, seek 200,000 new taxpayers

4:27 CAT | 08 May 2025

File photo: Lusa

The Mozambican government will this year increase tax audits, start taxing online sales and attempt to enrol 200,000 new taxpayers as part of its strategy to increase domestic revenue.

According to the proposed Economic and Social Plan and State Budget (PESOE) 2025, being debated from today in a plenary session at the Assembly of the Republic in Maputo, “on the revenue side, reforms will be implemented to broaden the tax base and improve efficiency in the collection of tax revenues”.

According to the document, these reforms include “strengthening the institutional capacity of the Mozambique Tax Authority with a view to improving the levels of efficiency and effectiveness of the tax system”, “optimizing” the taxation of digital transactions and “strengthening control over the application of reference prices in the export of mineral and agricultural products”.

It also includes the “operationalisation of tax machines to enable control of invoicing in the context of value added tax (VAT)”, the “revision of the Tax Benefits Code and the rationalisation of tax exemptions with the aim of stimulating competitiveness, fairness and tax justice”.

The “preparation and operationalisation of a Medium-Term Revenue Strategy to increase the taxation of income generated in the economy, combating tax evasion and the implementation of an incentive structure to stimulate the formalisation of companies operating in the informal sector” are also planned.

The budget proposal also plans to “modernize the taxation mechanisms of the digital economy”, with “special emphasis” on the taxation of commissions of electronic money agents and institutions, and of tourist agents “within the scope of digital transactions and the VAT and ISPC framework for economic agents who make online sales of goods and services”.

It also assumes the goal of “expanding the system for tracking and controlling goods in transit within the national territory through the electronic sealing of cargo in transit,” of “expanding the tax base, with the goal of including 200,000 new taxpayers”, as “part of the strategy for mobilizing internal revenues”, as well as “carrying out 400 tax audits and the same number of post-customs clearance audits, as well as intensifying the verification of companies’ accounting processes with a view to increasing tax recovery levels”.

Finally, the government assumes the objective of “operationalizing the Private Tax Enforcement Courts in all of the provinces of Mozambique with a view to increasing tax debt recovery rates”.

In the PESOE, the Mozambican government forecasts GDP growth of 2.9% for 2025, an average annual inflation rate of 7%, exports of goods worth US$8,431 million (€7,379 million) and Gross International Reserves of US$3,442 million (€3,045 million), equivalent to 4.7 months of coverage of imports of goods and services, excluding megaprojects.

State revenue for the entire year is expected to amount to more than 385,871 million meticais (€5,347 million), equivalent to 25% of GDP, and total expenditure to 512,749 million meticais (€7,107 million), corresponding to 33.2% of GDP, generating a budget deficit of 8.2%.

Source: Lusa