26 December 2013

Mozambique: Tax Collection Exceeds Targets

Maputo — The chairperson of the Mozambique Tax Authority (AT), Rosario Fernandes, announced on Tuesday that tax collection this year has surpassed the target set by the government.

In the initial budget for 2013 the fiscal revenue target was 113.9 billion meticais (about 3.8 billion US dollars). When the budget was revised in August, the target was increased to 120.4 billion meticais.

Speaking at commemorations of the seventh anniversary of the establishment of the AT, Fernandes said that target has been exceeded. As of 20 December (11 days before the close of the 2013 financial year), total fiscal revenue collected was over 124.41 billion meticais.

Fernandes said this was 26 per cent more that the total collected in taxes and customs duties in 2012, nine per cent more than the target in the original budget for 2013, and 3.7 per cent more than the figure in the amended budget.

The fiscal ratio (revenue collected as a percentage of GDP) is 26.51 per cent, Fernandes added, which is 0.81 more than the target in the amended budget.

He added that the number of registered taxpayers has increased over the year by 562,048 (the number of individuals, companies and other entities who have received a tax identification number - NUIT - during 2013). This was also more than expected - the target for issuing NUITs was surpassed 12.4 per cent.

Fernandes also announced that the American oil and gas company Anadarko is expected to pay capital gains tax by April 2014 on the sale of part of its holding in Area One of the Rovuma Basin, off the coast of the northern province of Cabo Delgado, where enormous deposits of natural gas have been discovered.

In August, Anadarko sold 10 per cent of its shares in Area One to the Indian company ONGC Videsh Ltd., for 2.64 billion US dollars, but no tax has yet been paid to Mozambique.

Ferandes said “all the technical details have been concluded, and all that remains is to deposit the money in the state coffers, which will happen by 30 April”.

He declined to put a figure on the capital gains tax, but said it was largest so far from any company. Previously the largest amount paid, was by the Italian energy company ENI, which paid the state 530 million dollars after the sale of 28.57 per cent of its holding in Rovuma Basin Area Four to the Chinese company CNODC for 4.21 billion dollars.

Even with the sale of ten per cent to ONGC Videsh, Anadarko continues to head the consortium that operates Area One, although its holding has fallen from 36.5 to 26.5 per cent. The other shareholders in Area One are the Mozambican National Hydrocarbon Company (ENH), with 15 per cent, Mitsui of Japan (20 per cent), BRPL Ventures and Videocon, both of India (10 per cent each), and PTT of Thailand (8.5 per cent).

A further six capital gains tax operations are under way, Fernandes said, and two or three of them should be concluded, with the revenue paid to the state, in 2014.


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