The Mozambican Tax Authority has notified the Portuguese oil company Galp of a tax liability amounting to 11.2 billion meticais (176 million USD), resulting from capital gains obtained from the sale of its stake in Area 4 of the Rovuma Basin. The amount refers to the tax on financial gains realized from the sale of natural gas assets to the XRG group, a subsidiary of ADNOC from the United Arab Emirates.
The collection was disclosed through a statement cited by Jornal de Negócios and comes the day after Galp announced its intention to submit the case to an international court under bilateral investment protection agreements.
According to the tax administration, the amount owed may still be revised upwards, with a detailed review of the transaction completed in March this year currently underway. The sale generated 56.2 billion meticais (881 million USD) for Galp, with potential additional amounts up to 25.5 billion meticais (400 million USD) depending on the final investment decision in the Rovuma LNG project.
In response, Galp stated that it had formally notified the State of a legal dispute regarding the application of tax legislation on capital gains. This notification initiates a preliminary dialogue period prior to any international arbitration proceedings.
The company affirms its full willingness to meet tax obligations and reach an understanding with Mozambican authorities but emphasizes that “taxes cannot be demanded without legal grounds.” The dispute involves strategic assets in the natural gas exploration and liquefaction chain, located in one of the country’s highest energy potential zones, and could become a landmark case regarding the application of tax regimes to foreign investments in Mozambique.
The tax claim comes at a time when the Government had already anticipated, in its Medium-Term Fiscal Scenario, the collection of taxes on the capital gains realized by Galp from the sale of its stake in Area 4 of the Rovuma Basin, expecting these revenues to be collected in the 2025-26 fiscal years.
The Government included these amounts in projections of future tax revenues, highlighting the strategic importance of the transaction for national public finances.
At the same time, the Portuguese oil company has sought to consolidate its presence in Mozambique through the expansion of its commercial operations and the strengthening of its social initiatives, particularly programs supporting youth development and investments in human capital — initiatives now taking place against the backdrop of a major legal and tax dispute.
Source: Diário Económico
