Municipalities to collect IRPS – and keep 10%

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Municipalities to collect IRPS – and keep 10%

12:02 CAT | 28 Nov 2017

Notícias (File photo)

Local authorities will collaborate with the Mozambican Tax Authority in the collection of personal income tax (IRPS) on gains derived from property located in their jurisdictions.

In return, 10 percent of the revenue collected will revert to them.

The measure results from the approval yesterday in Maputo by parliament of a law amending the IRPS code.

“It is not a matter of increasing taxes, but rather allocating 10 percent to the entity that participates in the collection of the tax, in this case the municipalities, who know better who leases the property,” Economy and Finance Minister Adriano Maleiane in support of the government proposal.

The proposal also stipulates the withholding of tax on holiday allowances and 13th and 14th month salaries, in order to mitigate the impact of taxation in the months in which these amounts are received.

“The proposed changes will have the effect of broadening of the tax base, easing taxpayers’ compliance with tax obligations and increasing tax revenue,” Maleiane said.

The estimated increase in IRPS revenue of the approval and implementation of the proposal is around 256.2 million meticais (about four million US dollars) over the period 2018 to 2020.

Parliament yesterday also started to debate its proposed budget and plan of activities for 2018. The proposed parliamentary budget is about 1.5 billion meticais, reducing the deficit from around 400 million meticais to about 260 million.

Parliament re-convenes in plenary session on Wednesday, Thursday and Friday of this current week with questions to the government, the budget proposal and its own business plan, among other matters.

Source: AIM