Mozambique: VAT exemption for sugar, cooking oil and soap awaits parliamentary approval

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Mozambique: VAT exemption for sugar, cooking oil and soap awaits parliamentary approval

2:59 CAT | 18 May 2020

File photo: O País

The price of sugar in Mozambique remains high because the decree that will extend VAT exemption until the end of this year has not yet been discussed in the Assembly of the Republic.

Sugar continues to be sold at prices 10 meticais per kilo higher in many commercial establishments in the country, because the stock was acquired during the mandatory payment of value added tax (VAT), which is added on to the retail price.

The rise in the price of sugar has to do with the start of VAT collection for products that were previously exempt, including soap and cooking oil. However, given the crisis facing these industries, the government backed down and extended the exemption until the end of this year.

But the decree-law must be discussed and approved by the Assembly of the Republic, the minister of Industry and Commerce clarified in Nampula this Friday.

With VAT included, consumer have been faced with a 200-meticais rise in the price of a 20-litre can of cooking oil, along with 60 meticais more for a box of soap and another 10 to 11 meticais per kilogram of sugar.

It is hoped that the VAT exemption will stimulate the consumption of domestically produced goods, to the detriment of imports.

By Ricardo Machava

Source: O País