Maputo, Mozambique, 31 Oct – Prospecting for oil and minerals in Mozambique will be exempt from value added tax (VAT) under the terms of the VAT Code review approved Thursday by Mozambique’s National Assembly.
The Mozambican government, which proposed the VAT exemption to the parliament, said it was focusing on mining as one of the main levers for the country’s social and economic development.
Large multinational companies are involved in prospecting or exploration of natural resources in the country, mainly coal, gas, heavy sands and minerals.
Giving reasons for the proposal to members of parliament, Mozambique’s Finance Minister Manuel Chang, said that VAT exemption on oil and mineral prospecting would eliminate the bureaucracy inherent to the repayment of the tax by sector operators.
The change to the VAT code also exempts production of insecticide and feed for animals to be consumed by humans and reduces VAT on rural electrification services to 40 percent.
“Exemption of raw materials for the feed industry aims to encourage development of this kind of production, reducing the cost of acquiring the goods and electricity is an indispensable vehicle for the social and economic development of the country,” Chang said. (macauhub)