On the other hand, the insecurity in Cabo Delgado province contributes to the postponement of the start of natural gas exploration activities in the deposits of area 4 of the Rovuma Basin, affecting the capture of revenue for the state coffers.
Thus, during the communication to the nation, the President of the Republic Filipe Nyusi, announced that by the end of the first half of this year, the country recorded an inflation rate of around 7.22 percent, against 5.3 that had been forecast for this year and 4.6 percent recorded in June last year.
However, this figure remains below the average for the region, but even so, Filipe Nyusi, considers inflation worrying, as it results in increased cost of living for Mozambicans.
As a way to remedy this situation, the government decided to reduce the incidence of Value Added Tax (VAT) from 17 to 16 percent, a measure that aims ultimately to improve the purchasing power of Mozambicans, by reducing prices.
Similarly, as part of the fiscal measures, Filipe Nyusi announced a reduction in the Corporate Income Tax (IRPC) from 32 percent to 10 percent for the agriculture, aquaculture, and urban transport sectors.
To encourage investment, the government decided to eliminate the need for permits for companies to operate, as long as they are registered.
Thus, in order to ease bureaucracy, the Police Stations of the Republic of Mozambique (PRM) will now recognize simple documents, free of charge, as part of the simplification of administrative processes.
As a way to increase the investment capacity to micro, small and medium enterprises in strategic sectors such as agriculture, housing and tourism, about 250 million U.S. dollars should be invested for the establishment of a loan guarantee fund.
Another measure that, incidentally, focuses on investments in the area of natural resource exploration, is the start-up of the Sovereign Wealth Fund before the flow of revenues from liquefied natural gas exploration begins.
This fund aims to ensure that oil revenues are used in a transparent way, while protecting the economy from external shocks.
In another development, the President of the Republic said that there is a need to promote housing and boost the construction materials industry to enable youth to build decent houses.
To this end, the mission of the Fundo de Fomento e Habitação (FFH) will be redirected to reduce housing costs.
