- The presidency of Mozambique approves the cut as a move to stimulate the dwindling economy
- This move is expected the favour Mozambique’s large population in business
Mozambique Cuts Profit Tax is currently the headline that is making the rounds in the South Eastern African country. This move is following the recent announcement of President Filipe Nyusi that the cut on profit tax will be a measure to boost the dwindling economy.
In specific, the cut is expected to reduce the profit tax from 32 percent to 10 percent of income, serving as a soft landing for the country that has a very impressive number of businesses, especially on the Small and Medium scale.
In explaining his rationale, the president submits that the current administration envisages that the tax cut will boost investments in sectors like Agriculture, Aquaculture and Transportation. In terms of transportation, the presidency is aiming at the urban transportation sub-sector.
Mozambique Cuts Profit Tax: Further Incentives
In the spree of incentives, President Nyusi announced in a gathering of business proprietors across the country that the tax administration will also offer a tax incentive on the Value Added Tax, VAT which will see the rate go to 16 percent from the current 17 percent.
Inclusively, all imported goods that are to aid agriculture or electrification will be labelled ‘zero rated’ and as significance, pay no VAT.
Away from incentives, other measures to boost the economy as conceived by the presidency point to the need to eradicate overarching government procedures to improve the transportation sector which aviation through the ease of entry visa is slated to play a key role.
The president as an actionable step further promised to waive the visa requirement for citizens of all countries that are not regarded as a likely source of illegal immigration
The Visa process applications are slated to be online, and the visas are then collected at the point of entry.
Africataxreview.com discovered that the reeled-out plans by the president are according to the “deep and daring measures” of President Nyusi that will be implemented over two years and requires the input of both the parliament and the judiciary.
Improving the efficiency and effectiveness of the public administration also ranked high in the president’s priority to reviving the economy.
Mozambique Cuts Profit Tax: The President’s Submission,
Investors will be granted visas for longer periods. Such visas would be valid for 90 rather than 30 days. For the first time, mixed visas will be issued, covering both tourism and business.
He promised that Visa applications could be made online, and the Visas were then collected at the point of entry.
A Mozambican Sovereign Wealth Fund will soon be set up, essentially to handle income from hydrocarbons “in a transparent way”. This would not be “a storehouse of money”, but would serve the Mozambican future.
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