IMF wants tax benefits for companies reduced in Mozambique

22 June 2007

Maputo, Mozambique, 22 June – The International Monetary Fund (IMF) expects to see a reduction in the tax benefits offered to companies in Mozambique, the resident IMF representative Gelix Fischer said in Maputo Thursday.

In a press conference, Fischer said that Mozambique needed “a second wave of economic reforms,” and it was fundamental to strengthen fiscal policy, reduce the cost carrying out business and continuing to deal with problems of governance.

The IMF representative said he supported the new fiscal policies for the mining and oil sectors, approved in May by the Mozambican parliament.

“In the past companies wanted a lot of tax breaks or they would not invest in Mozambique and the decision to grant them was correct as the country was coming out of a devastating civil war,” Fischer said.

Today’s reality, according to Fischer, is different and in his opinion there was no justification for big industries to have the same tax regime attributed to the Mozal aluminum factory at the end of the 1990s.

On Monday the IMF concluded its sixth and latest analysis of Mozambique’s economic performance under the terms of the Poverty Reduction Growth Facility (PGRF) and based on the positive result, released the remaining US$2.4 million of a US$17.1 million loan. (macauhub)