The Mozambican government is committed to implementing fundamental fiscal reforms to boost economic growth and achieve debt reduction targets. In a letter sent to the International Monetary Fund (IMF), the Minister of Economy and Finance, Max Tonela, and the Governor of the Bank of Mozambique, Rogério Zandamela, outlined plans to broaden the base of Value Added Tax (VAT) and introduce an “additional tax” on rental income.
The document highlights the government’s commitment to eliminate previously identified exemptions and zero rates by the end of 2023, as part of the full implementation of the VAT reforms. In addition, the government is seeking to increase domestic revenue by broadening the VAT base and introducing an additional tax on rental income from personal property.
Another measure mentioned in the letter is the intention to align the extractive industry’s reference price with international prices, following best practices and supported by tax administration measures. In April last year, the government took the decision to resume the automatic fuel price mechanism for diesel and gasoline prices, which has helped to reduce market frictions and strengthen fiscal responsibility.
These initiatives are part of a broader effort by the government to strengthen the country’s fiscal health and promote an environment conducive to sustainable economic growth. Implementing these reforms will be crucial to achieving Mozambique’s development goals and ensuring a solid foundation for the country’s economic future.
