Fall in the price of coal affects tax collection of Tete province, Mozambique

5 July 2016

The fall in the price of coal on the international market, which began two years ago, is having a negative impact on tax revenues, most notably direct taxes, said the governor of Mozambique’s Tete province, Paulo Auade.

The governor also said the fact that some companies hired by the mining companies have halted their operations, particularly Brazil’s Odebrecht, had affected tax collection, both on corporate and individual tax, the latter due to mass dismissal of workers.

Paulo Auade, who was speaking in the city of Tete city at the 12th Plenary Session of the Development Observatory, pointed out that in addition to contractors, also the companies directly involved in coal mining themselves, such as Vale Mocambique, JSPL Mozambique Minerals and International Coal Ventures Private Limited (ICVL), have reduced manpower.

The governor, cited by daily newspaper Notícias, also pointed out the negative effect on tax revenues of the cancellation of contracts by the mining companies with small and medium-sized companies that provide them with services.

“Even so,” Auade said, “the province achieved a GDP of 129 billion meticais (US$2.026 billion) in the 2015 financial year, 10 percent growth compared to 2014, a period that recorded GDP of 117 billion meticais.” (macauhub/MZ)