The Mozambican President today admitted the possibility of removing Value Added Tax (VAT) on basic necessities and intervening to reduce fuel prices in order to alleviate the cost of living.
‘We are working to find various solutions and one of them is to take the products in the basic basket of the Mozambican people and work to see if it is possible to remove VAT, which is what makes the products in the basic basket more expensive,’ said Mozambican President Daniel Chapo at a press conference in Addis Ababa, the Ethiopian capital, taking stock of his first participation in the 38th African Union (AU) summit.
At issue are the successive demonstrations and stoppages in the country, in which, in addition to contesting the results of the general elections on 9 October, Mozambicans are complaining, among other things, about the high cost of living and the lack of jobs.
Speaking to the press, Chapo promised to present measures to reduce the cost of living at the next sessions of the Council of Ministers, specifically with regard to the issue of taxes on basic necessities.
At the same conference, the Mozambican President admitted to intervening with government measures to reduce fuel costs, which, he said, make products more expensive for the consumer.
‘There may be, in matters relating to fuel, some additional aspects that lead fuel to a (higher) price, and as you know, when it’s expensive, it’s the last consumer who pays (…) The country doesn’t produce fuel, its price doesn’t depend on the country, but in the components that lead to the price being set, there could be an exercise in cutting certain aspects that could alleviate the price of fuel,’ said Chapo.
Chapo referred once again to the ongoing discussions between the government and the concessionaires with the aim of subsidising the price of tolls in the Greater Maputo region, as well as the initiatives of the economic recovery packages for small and medium-sized businesses in the face of the destruction and vandalisation during the post-election demonstrations.
‘I’m sure that in the next few days Mozambicans will feel that the government is attentive, working and focused on recovering the economy, but all of this is only possible with peace, social, economic and political harmony,’ defended Chapo, calling once again for an end to the destruction and vandalism.
Mozambican businesspeople had previously asked the government to exempt them from paying Value Added Tax (VAT) on products considered essential to offset the impact of the demonstrations and stoppages.
‘At a fiscal level, we are proposing the removal of VAT on oil, soaps and sugars, including chickens and eggs, which are basic products of great interest to the most disadvantaged strata,’ said Agostinho Vuma, President of the Confederation of Mozambican Economic Associations (CTA), on 12 December 2024.
The CTA estimated to Lusa on 30 December that more than 500 businesses were vandalised during the post-election demonstrations in Mozambique and at least 12,000 people are now out of work.
Since October, at least 327 people have died, including around two dozen minors, and around 750 have been shot during the protests, according to the Decide electoral platform, a non-governmental organisation that monitors electoral processes.
The demonstrations and stoppages were first called by former presidential candidate Venâncio Mondlane, who doesn’t recognise the results. On the streets today, the majority of the protests are by young people, who are questioning the 50 years of rule by the Front for the Liberation of Mozambique (Frelimo) and, in addition to the argument of electoral truth, are also motivated by unemployment and poor schooling, which, of the 32 million Mozambicans, affects a third of the approximately 9.4 million young people.
Lusa
