President of the Republic, Daniel Chapo, has promulgated the law that amends the Value Added Tax (VAT) Code, temporarily exempting essential goods such as sugar, cooking oils, and soaps, as well as the raw materials and machinery used in their production, the Presidency announced this Friday, May 23.
The promulgation follows Article 162, paragraph 1 of the Constitution of the Republic, after the proposal was unanimously approved by the Assembly of the Republic during the plenary session held on May 14. The Head of State confirmed that the law does not contradict the provisions of the Constitution.
The new legislation, effective until December 31, 2025, aims to mitigate the impact of the cost of living on households and boost domestic production. The government estimates that the measure will result in a fiscal revenue loss of around 2.2 billion meticais (approximately 33.8 million US dollars). However, authorities believe that the socioeconomic benefits outweigh the negative budgetary impact.
During the parliamentary debate, all parties represented in the Assembly supported the measure. The Mozambique Democratic Movement (MDM) highlighted the importance of the initiative in easing the cost of living but called for strict oversight of its implementation. The party also advocated for extending exemptions to sectors such as energy, water, and education, and reiterated its proposal to reduce the general VAT rate from 16% to 14%.
Frelimo (Mozambique Liberation Front) praised the government for the proposal, emphasizing its commitment to the population’s well-being. The party suggested that future revisions of the VAT Code should include a broader range of essential goods.
Renamo (Mozambican National Resistance) also supported the proposal and called for the inclusion of fuels in future exemption expansions, as a way to have a deeper impact on reducing the cost of living.
Meanwhile, the Podemos party highlighted the political consensus reached around the proposal, commending the spirit of dialogue and collaboration among the different political forces.
Source: Diário Económico
