Mozambican government should lower tax on capital gains and dividends

15 June 2010

Maputo, Mozambique, 15 June – the Mozambican government should review tax legislation, lowering, “high taxes on capital gains and dividends,” to attract funds and investment companies, a study published Monday in Maputo recommended.

The “Financing Mozambique” study carried out by Swiss Capital Partners, a company with headquarters in Maputo and founded in 2006, called for the Mozambican authorities to implement measures for the creation of alternative financial instruments.

“The challenge to overcoming these obstacles is, without a doubt, a big one and needs some time. There are, however, measures that the government could put into practice quickly and easily, that could have a positive impact on the venture capital sector,” the study said.

Saying that the business climate in Mozambique was “difficult” the document also noted that “labour legislation is very rigid and there is a weak legal system.”

“The results of the study confirm that Mozambique is not an ideal market for venture capital, taking into consideration the difficult business climate, a lack of a developed capital market, insufficient standards of corporate governance and accounting and, mainly, very few qualified businesspeople,” the study said.

Swiss Capital Partners also proposes that the government change regulation on public and private pension investment funds with a view to freeing up a “significant amount of cash, some of which can be invested in venture capital initiatives.”

The document also said that the government should fund the creation of a venture capital instrument, in order to increase financing options within the economy, as an alternative to retail banks. (macauhub)