Government approves economic package to boost growth to cut VAT from current 17%
The East African state of Republic of Mozambique is to cut its standard Value Added Tax rate from 17% to 16%. The government approved the measure on 8th November, and it now moves to parliament for review.
Businesses with a turnover above MZN 2.5 million (approximately €37,000) per year are obliged to register for VAT. There is no reduced rate. A nil rate applies to exports, basic foodstuffs, medical supplies and agricultural supplies. Financial services, residential rentals, education and medical supplies are exempted.
This is part of a range of economic measures to boost the economy. Profits tax (IRPC) is also to be cut from 32% to 10%.
Mozambique is taking an important role in securing natural gas supplies for Europe. The EU is supporting the military with direct aid to improve security around abundant natural gas field.
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