The Confederation of Economic Associations of Mozambique (CTA), the largest private entity in the country, warned this Monday that the high tax burden has contributed to the "zero profitability" of companies, calling on the government to restrain from introducing new taxes.

According to the association's president, Agostinho Vuma, who was speaking in Maputo during the ceremony to celebrate Taxpayers' Day, as far as the competitiveness of the private sector is concerned, "CTA studies indicate that the current tax burden stands at 36.1%, which is above the average for developing countries and very close to the maximum point of the Laffer curve (36.67%)".

"Exceeding this limit could result in zero profitability for private sector activity, with negative impacts on investment and economic growth," said Vuma, who also called for a review of the procedures and time needed to comply with tax obligations.

For the CTA, current tax procedures contribute to a high tax burden, which makes "practices such as smuggling and tax evasion more attractive" among small producers.

To this end, the Mozambican business community suggested the integration and centralization of tax policy in the Ministry of Finance, with the aim of ensuring greater control of tax policy and analysis of its effects on the performance of the economy, and also called for the fight against corruption to prevent the detour of resources.

Speaking on the occasion, the president of the Tax Authority, Elisa Zacarias, referred to the reforms made in recent years, highlighting the digitization of services (Taxpayer Portal, e-Tributação system, payments via banks and the e-Declaração platform), initiatives aimed at making compliance with tax obligations more agile, secure and accessible to all taxpayers.

(Photo DR)