The Confederation of Economic Associations of Mozambique (CTA) has pledged to pressure the Assembly of the Republic (AR), the country’s parliament, to introduce reforms in fiscal policy aimed at making Mozambique more competitive in the Southern African region and globally.
The announcement was made by CTA Vice President, Onório Manuel, during a press briefing shortly after a meeting granted to business leaders by the Speaker of Parliament, Margarida Talapa, today in Maputo.
CTA was represented by its President, Álvaro Massingue.
The pressure arises from discrepancies observed, for instance, in the application of Value Added Tax (VAT) across Southern African countries, where the average rate is 14 percent, compared to 16 percent in Mozambique.
Another example is the Corporate Income Tax (IRPC), which averages 29 percent in the region and across Africa, while in Mozambique it stands at 32 percent.
“Therefore, this is the benchmark we must understand, because Mozambique is not an island,” he said.
“When we have investors who want to invest in Mozambique,” he continued, “they stop, they conduct comparative studies between the tax burden in Mozambique and that of neighboring countries.”
He added that countries with above-average tax rates become less competitive.
“We want to be a competitive country, naturally taking into account Mozambique’s comparative advantages,” he said.
He pointed to the country’s geographic location, abundant natural resources, and young workforce as key factors appreciated by investors, but noted that the tax burden drives them to other countries.
“Therefore, this matter must be framed in a way that is truly attractive,” he concluded.
When asked about the meeting, Onório Manuel explained that its purpose was to present the new governing bodies of CTA, as well as to stress the need for fiscal reforms, which the country’s largest business association considers urgent to boost the business climate in Mozambique.
“We believe that the magic wand for achieving sustainable development in Mozambique lies in reforms. It is in this context that CTA presented a set of ideas, ranging from fiscal policy reforms to monetary policy reforms, and also some administrative measures aimed primarily at creating a business environment free of barriers and constraints,” he emphasized.
He noted that the meeting was cordial and that Talapa assured CTA that its doors are open to receive all proposals that can positively influence the business environment.
By reforming fiscal policy, CTA believes the move will broaden the State’s tax base, thereby allowing the government to collect more revenue, while more companies will increase production and contribute more in taxes.
Source: AIM
