The Mozambican government is preparing a reform of the organic structure of the Tax Administration (AT), to force companies operating in the extractive sector to comply with their tax obligations. To this end, the executive should soon announce a "risk management commission" with a view to starting the reforms.

A report by the International Monetary Fund (IMF) on the commitments made by the Mozambican government in the review of the Extended Credit Facility (ECF), concluded this month, reveals that "the AT has prepared a reform to modernize its structure and continues to make progress in collecting and cross-referencing third-party information to increase taxpayer compliance and enforce the collection of tax arrears."

"The proposal to reform the AT's internal organic structure is expected to be approved by the Council of Ministers by the end of July 2023. The organic structure will integrate the risk management committee created to strengthen compliance, and design tax and customs procedures across all value chains, with a focus on mining and gas taxation. This committee has started using the mining and gas risk assessment matrix to carry out audits on extractive companies," reads the document.

Cited by Lusa, the same report points out that the Ministry of Economy and Finance "is committed to remedying the deficiencies in the VAT refund mechanism and to settling the accumulated arrears". It even plans to draw up a strategy to settle the current 'stock' of overdue VAT refunds, worth 39 billion meticais at the end of December 2022, to be taken to the Council of Ministers in August 2023.

"The government is fulfilling its commitment in the 2023 budget to retain 16.5 percent of the share of gross VAT collection for the payment of refunds, to ensure that sufficient resources are available for refunds and to avoid any accumulation of delays," the Mozambican government said.