Mozambique: Cyclone Poses Challenges for Tax Administration

Maputo — Boane (Mozambique), 18 Apr (AIM) - The chairperson of the Mozambique Tax Authority (AT), Amelia Nakhare, warned on Thursday that cyclone Idai, which struck central Mozambique in mid-March, not only claimed hundreds of lives, and left a trail of destruction, but has also posed huge challenges for the tax administration.

Speaking at the conclusion of a recycling course for tax officers in Boane, about 30 kilometres west of Maputo, Nakhare stressed that the cyclone struck at a moment when the Mozambican economy was recovering from a deep crisis.

The targets set earlier this year for tax collection were now under threat. The national target for 2019 was to collect 244.2 billion meticais (about 3.8 billion US dollars, at current exchange rates). 15 per cent of this sum was to have come from the central region, and Sofala province, which suffered the worst cyclone damage, accounted for 60 per cent of the central region's tax collection target.

This impact could be worsened by the multiplier effect of the disaster, affecting the supply of goods and services elsewhere in the country. "This could lead to higher inflation and to the shrinking of economic growth, initially forecast at 4.7 per cent for 2019", sad Nakhare.

"Our main mission", she stressed, "is to ensure tax justice and macro-economic stability, which requires a tax system with greater expertise, intelligence and effectiveness".

Attending the recycling course were over 80 AT staff from across the country, as part of the human development programme of the institution.

Nakhare stressed the importance of last year's unification of the tax and customs careers structures "breaking the taboo that used to establish impassable barriers and limits between two classes in the same institution".

Paramilitary training is now being extended to all sectors of the AT, and not just customs. A further 300 non-customs staff will undergo military training this year, said Nakhare. "This will ensure the involvement of most of the staff in the challenges posed to the tax system in collecting taxes, the customs management of borders, and inspection throughout the country".

The challenges of fighting tax evasion, Nakhare added, required a redoubling of efforts to improve efficiency, which involves raising the awareness of each tax officer "about the scale of our mission".

The AT still faces a major struggle in dealing with contraband tobacco and alcohol products, she admitted, despite the use of fiscal stamps on locally produced and legally imported cigarettes, beer, wines and spirits.

Criminals have adapted to the change through the illegal purchase and re-use of fiscal stamps, thus undermining the measure.

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