
Maputo, 20 Aug (AIM) – Lutero Simango, the leader and presidential candidate of the Mozambique Democratic Movement (MDM), the country’s second largest opposition party, has promised to cut some of the country’s main taxes should he win the presidential election scheduled for 9 October.
Interviewed on Monday by the independent television station STV, Simango promised to cut Value Added Tax (VAT). Last year the government cut the general rate of VAT from 17 to 16 per cent. The MDM wants to bring it down to 14 per cent.
Simango also pledged to cut personal income tax (IRPS), but did not say by how much. The current top rate of income tax is 32 per cent.
He made the counter-intuitive claim that cutting tax rates will increase the amount of revenue raised. He admitted, however, that in the first seven months the impact of reducing the tax rates will be negative, but a year later the situation will improve. He made no attempt to explain the mathematics behind this claim, or where the state could find the funds to compensate for what would be a drastic reduction in VAT revenue.
He claimed that, in general, with the cut in VAT, prices will fall, particularly the price of fuel. Simango argued that conditions must be created to ensure that the public enjoys ever greater purchasing power.
A further major plank in the MDM’s platform is to take political parties out of the state apparatus. There will no longer be any political party branches inside the public administration.
The opposition has always protested that the ruling Frelimo Party has branches operating illicitly in the state, and that promotions are often dependent on Frelimo membership.
Simango promised to sweep this system away, so that advancements in the public service will depend on merit and not on political party membership. He pledged to introduce a bill on the “depoliticisation” of the State.
He wanted to end the situation whereby the Mozambican economy is dominated by the informal sector. Simango said this meant that only nine per cent of the population pays taxes. He wanted to move to a situation where at least 65 per cent of the active population is working in the formal sector.
He pledged that, during the five year presidential term of office, his government would build 2,000 new schools, drawing the money required from the country’s Sovereign Wealth Fund.
He believed that teachers’ frequent complaints over low wages and unpaid overtime could be solved through transparent management and fighting against corruption. This would include eliminating 5,000 ghost workers from the state apparatus – these are workers who draw wages, but in reality do not exist.
(AIM)
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