In a race against tax evasion, the Tax Authority is accelerating reforms. Digitalization, self-invoicing, and new rules aim to restore trust and broaden the tax base. The challenge? Turning a fragile tax system into a fairer and more sustainable state.
E&M sought to interview Mozambique’s Tax Authority (AT), requesting a meeting with its new president, Aníbal Mbalango — a newly appointed leader but with a long career inside the institution. Despite initial openness, he declined the invitation, explaining that he is focused on the challenges of the role and will only make public statements “when there are concrete results to present.” Faced with this unavailability, we turned to AT’s strategic plan, cross-referencing its key action areas with the main challenges identified by experts and civil society actors. The picture that emerges is of an institution seeking modernization in a context of severe institutional limitations.
A Strategy to Break the Vicious Cycle
The AT Strategic Plan 2022–2026 is the main guiding document for the current tax administration. Its central objective is to “ensure the efficient and effective collection of revenues for the sustainable financing of the State,” based on four strategic pillars: improving tax and customs compliance, technological and organizational modernization, valuing human capital, and strengthening governance and institutional transparency.
One major issue is the heavy reliance on taxation from large formal companies, in a context where most economic activity takes place outside the tax system. To address this, AT has committed to broadening the tax base, both by formalizing small operators and by tightening control over traditionally neglected sectors, such as real estate, tourism, and small-scale commercial agriculture. According to PESOE 2025, the target is clear: bring 200,000 new taxpayers into the system in a single year and carry out 400 tax and customs audits, focusing on company accounts and tackling systemic fraud and evasion. Whether AT can actually deliver on these goals and improve revenue collection remains to be seen.
Digitalization: From Promise to Action?
Digitalization is the most visible pillar of the reform underway. The Tax Authority has begun operationalizing systems such as e-Tax, which allows electronic submission of tax returns, and is working to expand mechanisms such as SAF-T (Standard Audit File for Tax), a digital reporting model already used in Portugal, Angola, and Cape Verde.
This standardized electronic file, developed with technical support from Ernst & Young and financing from the Millennium Challenge Account (an independent U.S. government agency), will be mandatory for larger companies and will enable automated cross-checking of accounting data, reducing opportunities for manipulation and facilitating audits.
In addition, AT is testing new oversight mechanisms for digital economic activity, such as commissions from mobile money agents, online sales, and digital tourism, to ensure these emerging business models are not left untaxed. According to the strategic plan, this represents a “modernization oriented toward tax equity.” The approach combines digitalization, specific regulation, and gradual integration of these actors into the tax base.
However, AT acknowledges that digitalization is not an end in itself. “The adoption of technologies must be guided by concrete objectives: efficiency, cost reduction, and the fight against corruption,” the plan stresses. The concern here is to avoid what many experts warn against: blind, context-less digitalization without supporting institutional structures.
Customs at the Epicenter of Restructuring
The customs sector remains one of the system’s greatest vulnerabilities. Smuggling, under-invoicing, and corruption undermine AT’s credibility, especially at land borders. In response, new electronic platforms are being rolled out for customs declarations and goods traceability, with stronger integration into maritime and air port systems.
Another flagship measure is the creation of mobile post-clearance inspection units, operating permanently to monitor the actual destination of goods after entering the country. At least 400 such inspections are planned this year. But the question remains: is that enough, given the scale of cross-border trade?
AT is also reviewing its policy of customs tax exemptions, which — while justified in certain contexts (such as during the early phases of major projects) — have often been abused, according to several civil society organizations. The proposal is to make the process more transparent, with objective criteria and regular audits to assess their economic impact.
VAT: A Tax With Many Ghosts
Value-Added Tax (VAT) is paradoxically one of the largest sources of revenue and one of the system’s greatest headaches. AT admits internally (and claims it is working to correct) that the current model has serious flaws: excessive exemptions, poorly managed credits, difficulties in refunds, and widespread use of “adjustment notes” with no real impact on cash flow.
AT’s plan is to strengthen VAT management in sectors such as mining, where large investment flows remain outside the direct tax collection circuit. The goal by 2027 is to expand the VAT base from the current MZN 72 billion to over MZN 105 billion. In addition, AT intends to introduce automated control and refund mechanisms through digital platforms to speed up timelines and reduce disputes between businesses and the state. The aim is to restore confidence in a vital tax.
Regional Integration and Fiscal Risks
AT does not ignore the risks of poorly prepared regional integration. Within the Southern African Development Community (SADC), Mozambique has already failed to implement some exemptions provided for in regional protocols, such as for vehicles produced in South Africa, fearing revenue losses.
To mitigate this, AT is working with the Ministry of Economy and Finance on the gradual harmonization of fiscal policies with regional countries, particularly in customs and including income and consumption. Still, AT insists that “integration should be seen as an opportunity and not a threat, provided it is accompanied by strong internal reforms.”
Formalization With Incentives (Not as Punishment)
Another key front of AT’s plan is the formalization of the economy. But contrary to common assumptions, the goal is not to immediately turn small operators into taxpayers: the aim is to include them in a clearer economic circuit, with both rights and obligations.
The proposal is a phased model, with simplified regimes and incentives to ease gradual transition. The self-invoicing proposal, in which formal companies issue invoices on behalf of informal suppliers, is being tested as a way to fight informality without creating exclusion. “The idea is not to punish, but to integrate,” the AT plan states. “Only with productive inclusion and trust is it possible to sustainably broaden the tax base.”
Investing in Human Capital
Fiscal reform is also about people. AT recognizes the technical and ethical limitations of many of its staff. For this reason, it launched an aggressive plan for internal training, strengthened ethics courses, and stricter accountability. Since 2023, more than 1,000 employees have participated in technical training, and over 200 have faced disciplinary proceedings, some resulting in dismissals.
Institutional image is a priority. New reporting channels and internal performance evaluation mechanisms are being created to make AT a more respected and transparent entity.
How Much Is Lost to Tax Exemptions?
Studies by the Ministry of Economy and Finance (MEF) indicate that tax exemptions granted to mega-projects and strategic sectors such as oil, gas, and mining amount to more than 3% of GDP annually. In many cases, these exemptions last for decades and include fiscal stability clauses that are difficult to reverse.
AT plans, by 2025, to review exemptions deemed excessive in an effort at rationalization. The challenge is balancing investment attractiveness with fiscal fairness.
Experts argue the problem is not only the scale of exemptions but also the lack of clear criteria and regular evaluation mechanisms. Many companies benefit without demonstrating returns in jobs, technology transfer, or reinvestment. The proposal is to create a cost-benefit matrix to measure the real fiscal and economic impact of each incentive granted.
Aníbal Mbalango: A New Face, a Veteran Insider
An economist by training and a senior figure in the Tax Authority since its creation, Aníbal Mbalango assumed the presidency this year with promises of modernization and efficiency.
He is regarded as a deep connoisseur of the fiscal machinery, having led internal reforms and projects with multilateral organizations. His appointment is seen as a bet on technical continuity, though under renewed political pressure.
Reserved and technical in profile, Mbalango has chosen to avoid the spotlight in his first months in office, focusing instead on reorganizing teams and accelerating digitalization. Internally, he is known for his management rigor and demand for results. Expectations are that he will present the first concrete achievements before the end of the current fiscal year.
Text: Celso Chambisso • Photo: D.R.
