Mozambique: Waiving Social Security fines “is a sensible measure” – Kekobad Patel

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Mozambique: Waiving Social Security fines “is a sensible measure” – Kekobad Patel

1:54 CAT | 02 Jul 2025

FILE - The decree "covers all taxpayers and self-employed workers linked to the Mandatory Social Security System, who have not fulfilled their contribution obligation", said the Council of Ministers. [File photo: Amós Fernando/DW]

Waiving social security fines is not a populist measure by the Mozambican government – It simply acknowledges that many people do not have the money to pay them, says an economist interviewed by DW.

The Mozambican government this Tuesday (01-07) approved a decree that waives fines and reduces interest on arrears for taxpayers and self-employed workers in debt to the National Institute of Social Security.

The measure covers all those who have not fulfilled their contribution obligations, with the stated aim of facilitating regularization and expanding the base of contributors in the system. Even so, the decision raises doubts about its practical effects, especially in terms of balancing public accounts and tax justice.

The decision comes in a context in which a large percentage of self-employed workers operate outside the formal system and in which the National Institute of Social Security (INSS) has accumulated large amounts of outstanding debt.

In an interview with DW, Mozambican economist Kekobad Patel considers the measure more sensible than populist, but warns of the risk of “not resolving anything”.

DW Africa: In a fragile economic context, is this decision sensible or populist?

Kekobad Patel (KP): I wouldn’t say it’s a populist measure, but it is sensible, because the government itself recognizes that the economic conditions in the country do not allow people to pay what they owe to the state or, in this particular case, to the National Institute of Social Security (INSS).

At the same time, we don’t know what impact this measure will have if they don’t provide us with figures. And I don’t know [how] cases of interruption of payments will be handled, whether people will be able to start again when the economic situation allows.
At the moment, the measure will also have little impact on people’s budgets. If people are no longer working, how are they going to pay social security? [What I advocate is] a suspension of the payment itself [that does not imply] the payment of interest or fines.

With the whole [economic and financial] situation we are experiencing, [forgiveness] is a sensible measure. But it does not solve any problem, because people will continue not to pay.

DW Africa: What would be the most appropriate measure?

KP: The most appropriate measure is to get the economy going, start creating jobs and create a better business environment – safer, with less bureaucracy – to attract investors.

The problem is that there is no investment in the country at the moment. So, how do you create jobs? We really need people to understand that we have to get this machine called the “economy” going again. To create wealth, consumption must increase. But how can this be done if there is no work? Just imagine how many people have lost their jobs over the last six to eight months…

DW Africa: And does the waiving of fines promote tax justice or create inequality between those who pay and those who do not?

KP: If a person does not […] contribute their mandatory monthly contribution, they are suspended by the National Social Security Institute. If they pay again in six or nine months, the counting only starts from then on. Those who pay will receive their pension in full when it is time to retire.

Source: Deutsche Wellle