The Parliament approved this Wednesday, November 30th, in generality, the law proposal that amends the 9th, 10th, 12th, 17th, 19th, 20th and 21st articles of the Value Added Tax (VAT) code. The approval had the votes in favour of the Frelimo majority.
The amendments to these articles aim to accommodate the 1 percentage point VAT reduction announced when the Stimulus Package for the Acceleration of the Economy (SAP) was introduced, whose measures lower the IRPC from 32% to 10% in agriculture, aquaculture and public transport, and VAT from 17% to 16% in agriculture and renewable energy.
The parliamentary opposition – Renamo and the Mozambique Democratic Movement (MDM) – voted against as they believe that the VAT is still far from meeting the aspirations of Mozambicans.
For Renamo, “the reduction of VAT by one percentage point is derisory, it does not help in reducing the prices of basic products.
MDM agreed with Renamo, adding that “the most sensible thing would be to reduce VAT to 14 percent in order to be in line with the average of the Southern African Development Community (SADC) region.
Frelimo said that the proposed law “will contribute to broadening the tax base as well as increasing state revenues, thus improving the performance of the economy and the balance of payments.
The 20 measures to stimulate the economy announced last August by the President of the Republic, Filipe Nyusi, include a 22% reduction in the rate of Corporate Income Tax (IRPC).
