Public projects funded by international partners are exempt from VAT in Mozambique

15 May 2018

The acquisition of goods and services for public projects financed by international partners will be exempt from Value Added Tax (VAT) in Mozambique, according to a Mozambique Tax Authority (AT) official.

Marcelo Mazivila, the AT’s Tax Standards director, also told Portuguese news agency Lusa that VAT due on the purchase of goods and services for public projects will be borne later by the government.

The decision results from applying the Tax Mechanism for Regularisation of VAT on purchases of goods and services and is in compliance with a decree approved in November 2017.

Mazivila said that the measure aims to reduce the financial effort that is borne by companies involved in development projects, which delayed the operations of these entities. Each entity involved in a public project will receive a certificate attesting to their eligibility for VAT exemption.

The director of Tax Standards of the AT reported that the Japanese International Cooperation Agency (JICA) was involved in the design of his new measure. (macauhub)