The Mozambican Executive is preparing a reform of the organic structure of the Tax Administration (AT), foreseeing the creation of a risk management commission, with a focus on mining and hydrocarbon taxation.
“The AT has prepared a reform to modernise its structure and continues to advance in the collection and cross-checking of third-party information to increase taxpayer compliance and enforce the collection of tax arrears,” said a report by the International Monetary Fund (IMF) on the commitments made by the Government of Mozambique under the review of the Extended Fund Facility.
According to the document, the proposal to reform the internal organisational structure of AT is expected to be approved by the Council of Ministers by the end of July.
“The organic structure will integrate the risk management commission created to strengthen measures and design tax and customs procedures in all value chains, with a focus on mining and gas taxation,” it adds.
The same report points out that the Ministry of Economy and Finance is committed to addressing shortcomings in the VAT refund mechanism and clearing accumulated arrears.
“It plans to develop a strategy to regularise the current stock of overdue VAT refunds, amounting to 39 billion meticais,” it clarifies.
The IMF also emphasises that “the Government is fulfilling its commitment in the 2023 Budget to retain 16.5% of the share of gross VAT collection for the payment of refunds, and to ensure that sufficient resources are available.
On 6 July, the IMF approved the second review of the Extended Fund Facility for Mozambique, guaranteeing a disbursement of US$60.6 million, and revised Gross Domestic Product (GDP) growth from 5% to 7%.
With this approval, Mozambique now has 212.09 million dollars received, out of a total of 470 million announced in May 2022.
In its macroeconomic forecasts for this year, the IMF predicts an acceleration of the country’s GDP growth from 4.2% in 2022 to 7% this year, anticipating that by the end of 2023 inflation will have fallen from 10.3% to 6.7%, the same as in 2021, but still almost double the previous two years.
The debt-to-GDP ratio is expected to maintain its downward trajectory and reach 89.7% at the end of this year, improving from 95.5% last year.
