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Mozambique cuts VAT to 16% 2023 – update

VAT cut from 17% to 16% implemented; new 5% reduced rate added

The East African state of Republic of Mozambique has cut its standard Value Added Tax rate from 17% to 16%.

A new 5% reduced rate has been added for many previously zero-rated or exempt supplies, including: eduction (including private tuition); medical; and health services.

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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