The country's economic and social development programs are currently financed, to the tune of 85%, using revenues collected internally by the government, with the remaining 15 percent covered by external resources. It is in this context that the Tax Authority of Mozambique (AT) considers it a priority to make the tax system more efficient to cover the budget deficit.
The president of the TA, Amelia Muendane, said on Wednesday in Maputo that, in the meantime, there is a window of hope for financing state expenses with recourse to domestic taxes, a fact that stems from the exploration of mineral and oil resources that could project the country in terms of potential in the mobilization of resources from domestic revenues.
"Mozambique figures in the spotlight with respect to natural gas and oil exploration and production, given the significant discovery of natural gas reserves in the Rovuma basin totaling about 180 trillion cubic feet (tcf) recoverable," he said.
According to her, the gas exploration will place the country in the group of the largest producers and exporters of this resource at a global level, which imposes challenges to the Mozambican Tax System in the adoption of increasingly robust mechanisms in the management of tax collection processes that come from that resource.
Speaking at the opening of the Third Scientific Seminar promoted by the Center for Customs and Tax Studies, Amélia Muendane said that it was in this context that the AT created the Extractive Industry Taxation Unit, responsible for contract risk analysis, taxation control, and specialized training for the different players involved in this sector, bearing in mind the need to ensure the correct implementation of internationally applicable standards in the extractive industry.
Over the past five years the extractive industry has contributed, on average, in total state revenue the equivalent of 7%, and in gross domestic product (real GDP) 2.4%.
"This situation shows that there is still a big challenge for the Mozambican tax system in terms of maximizing revenues from this sector, which involves a careful risk analysis of the contracts. It is estimated that in a scenario where the fiscal risk is minimal, the weight of revenues from the oil sector in relation to total revenues would be around 31.2% and in terms of GDP in the range of 10.7%," he stressed.
Three articles selected by the jury were presented during yesterday's scientific conference, on themes such as "Risks of Dutch disease in the Mozambican economy: the case of coal", "The development of the Mozambican tax system in times of crisis: reflections on the impact of Covid-19 on the extractive industry", and "Oil and gas industry in the promotion of inclusive development in Mozambique - challenges and prospects for taxation: the case of the Panda and Temane gas project 2004 - 2014".