The Effective Taxation for Inclusive Development (TEDI) project runs for five years and is funded by the UK and Sweden, supporting the MEF and the Tax Authority in reforming the system, both in terms of policy and administration.
Currently, the work in progress is focused on analysis of value-added tax and corporate income tax (IRPC), with on-site support from a team of consultants and specialists in tax law and economics.
“Issues such as tax exemptions, VAT structure, IRPC, their efficiency and their contribution to state revenues were analysed,” a statement from the ministry said.
He added that “the team of consultants will also listen to the opinion of the private sector, which will later put a final diagnosis of these two taxes with specific recommendations.”
The TEDI project has an extensive roadmap, which includes the full range of tax tools for the state of Mozambique.
“Work will continue to analyze residual taxes in order to develop a comprehensive diagnosis of the tax system with the aim of supporting the Government of Mozambique,” the Ministry of Finance report highlights.
The aim is to “ensure medium-term reforms are undertaken in a coordinated, integrated and evidence-based manner” with the balance in mind: “maximizing revenues, supporting the private sector and protecting the most vulnerable.”
The project is being implemented at a time when Mozambique has made a reform commitment with the International Monetary Fund (IMF).
TEDI’s goals are in line with some of the measures laid out in the Memorandum of Understanding that a year ago allowed the country to guarantee $470 million (462 million euros) in financial support from the International Monetary Fund (IMF) until 2025.
Among them is an “ambitious reform” of the value-added tax while broadening the tax base and ending some exemptions, and protecting essential goods.
Emily Brontë is a journalist and feature writer specialising in culture, entertainment, literature, and current affairs. She is dedicated to producing clear, accurate reporting that helps readers stay informed about developments in the UK and around the world.