Mozambique: Prime Minister Insists On Payment of Vat

5 September 2022
Agencia de Informacao de Mocambique (Maputo)

Prime Minister Adriano Maleiane on 26 August ruled out any further reduction in Value Added Tax (VAT).

On 9 August, President Filipe Nyusi announced that the government intends to cut the standard rate of VAT from 17 to 16 per cent. All imported goods intended for agriculture or electrification will be zero rated and thus pay no VAT.

Opposition political parties have been calling for much deeper cuts in VAT - but, at a press conference marking the end of a two-day working visit to the southern province of Gaza, the Prime Minister said further cuts are out of the question since VAT is a key source of funding for the state budget. He insisted that the tax must be paid, and strongly objected to the practice of shops and other businesses striking deals with their clients, whereby the latter do not pay VAT.

People who did not pay VAT on their purchases were holding back the country's development, he said. Asking clients "do you want it with or without VAT?" was completely illegitimate. "We all have to pay VAT because that is the only way we will grow", Prime Minister Maleiane said.

Read the original article on AIM.

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