The country’s economic and social development programmes are currently 85% funded by revenue collected internally by the State, with the remaining 15% covered by external resources.
It is in this context that the Tax Authority of Mozambique (AT) considers it a priority to make the tax system more efficient to cover the budget deficit.
The president of the AT, Amelia Muendane, said yesterday in Maputo that, in the meantime, there is a window of hope for financing state spending using domestic taxes, a fact that stems from the exploration of mineral and oil resources that could project the country in terms of potential in mobilising resources from domestic revenues.
“Mozambique figures at the centre of attention in terms of prospecting and production of natural gas and oil, given the important discovery of natural gas reserves in the Rovuma basin that total about 180 trillion cubic feet (tcf) recoverable,” she said.
According to her, the gas exploration will place the country in the group of the world’s largest producers and exporters of this resource, which imposes challenges to the Mozambican Tax System in adopting increasingly robust mechanisms in the management of tax collection processes arising from that resource.
Speaking at the opening of the Third Scientific Seminar promoted by the Centre for Customs and Tax Studies, Amélia Muendane said that it was in this context that the AT created the Extractive Industry Taxation Unit, responsible for analysing the risks of contracts, controlling taxation and specialised training of the different actors involved in this sector, bearing in mind the need to ensure the correct implementation of internationally applicable standards in the extractive industry.
According to “Notícias”, in the last five years the extractive industry has contributed, on average, to the State’s total revenue with the equivalent of 7%, and in the Gross Domestic Product (GDP) with 2.4%.
“This situation shows that there is still a great challenge for the Mozambican tax system in terms of maximising revenue from this sector, which involves careful risk analysis of contracts. It is estimated that in a scenario in which the fiscal risk is minimal, the weight of revenues from the oil sector in relation to total revenues would be around 31.2 percent and in terms of GDP around 10.7 percent,” he said.
