Maputo, Mozambique, 8 May – The Mozambican Finance Minister, Manuel Chang, Monday in Maputo’s parliament presented law proposals to simplify and modernize the taxation system for oil and mining operations.

Under the terms of the proposals, any company that strikes oil in Mozambique would have to pay a 10 percent charge on the value of the oil, calculated as an average of international prices and for natural gas the rate will also be 10 percent.

According to Mozambican news agency AIM, these law proposals will replace the previous taxation framework for oil activities, which is considered to be more complex, as it made a distinction between onshore and offshore operations and even the depth of offshore operations.

If the laws are approved by parliament they will not affect contracts that have already been signed unless the companies prefer to join the new taxation system.

In the case of mining operations there will be two taxes, one on production and one on the area covered by the concessions.

The tax on production will be 10 percent in the case of diamonds and precious metals, 6 percent for semi-precious stones, 5 percent for base metals and 3 percent for coal and other minerals.

Tax on the area will vary between 10,000 and 5,000 meticals per square kilometre according to the type of license or concession. (macauhub)