The president of the Commercial Association of Beira (ACB), the main city in central Mozambique, yesterday regretted that the reduction in Corporate Income Tax (IRPC) announced on Tuesday did not cover more economic activities.

On Tuesday, the President of the Republic, Filipe Nyusi, announced a package of 20 measures to stimulate the economy, including a reduction from 32% to 10% the IRPC rate on agriculture, aquaculture and public transport.

Reacting in a press conference to the measures, the president of the ACB, Félix Macha, argued that the tax relief should have covered other areas with direct impact on the lives of the majority of the population, such as baking and poultry.

"Most of the ladies who do some business in this country are connected to poultry farming, and everyone eats bread these days, so it is the opinion of the ACB that bakeries should be included in the reduction of the IRPC," Macha told Lusa.

Assuming that the measures announced by the head of state took into account the need to avoid a larger budget deficit, the businessman considered that if the tax relief had included some areas with impact on the cost of living, the public accounts would not suffer a significant effect.

"We are not saying that what was announced is wrong, rather we are asking for the extension of the IRPC, so that the worker benefits," he stated.

He also pronounced on the creation of a loan guarantee fund of 250 million dollars, aiming to reduce interest rates, and asked that the management and allocation of the amount be decentralized so that the economic activities developed in the provinces will benefit.

"We propose that each province identify the areas of interest that can leverage small and medium enterprises, because the country is big and the private sector is not only in Maputo," he said.

Regarding the decision to transfer 10% of natural resource exploitation revenues to the provinces where they are extracted, the ACB president congratulated the decision, noting that it will promote development.

"The challenge is in its implementation. It's good that a monitoring office was created, with the hope that the private sector will be represented," pointed out Félix Macha.

Macha called for special attention to the areas affected by natural disasters and armed violence in the northern province of Cabo Delgado, noting that devastation is greatest in these areas.

"The new measures ignore the cyclones and the Cabo Delgado issue," he lamented.

The 20 measures announced this week by Filipe Nyusi are part of the SAP - Stimulus Package for Economic Acceleration aimed at responding to the country's growth needs, the negative impact of the Russia-Ukraine war, armed violence in Cabo Delgado province, northern Mozambique, and natural disasters.

The measures lower the IRPC from 32% to 10% in agriculture, aquaculture and public transport, and the VAT from 17% to 16% in agriculture and renewable energy.

The Mozambican Head of State also pointed out the introduction of tax incentives for new investments, during the next three years, but did not advance the rates of these incentives.

In the package, the share of natural resource revenues transferred to the provinces where they are extracted is increased from 2.5% to 10%, and a $250 million loan guarantee fund is created for banks to make credit available to the economy at more affordable interest rates.