Maputo, 25 Feb (AIM) – The Mozambican government announced on Tuesday that it will submit a bill to the country’s parliament, the Assembly of the Republic, to exempt sugar, cooking oil and soap from Value Added Tax (VAT).
These products paid VAT until 2007, when the government agreed to a temporary exemption. That exemption was renewed in 2020, but, as from 1 January 2024, VAT was charged on sugar, soap and oil at the standard rate of 16 per cent.
The Government spokesperson, the Minister of State Administration, Innocencio Impissa, at the end of a meeting of the Council of Ministers (Cabinet), held in the northern city of Pemba, announced that the government intends to re-introduce the exemption. If the Assembly passes the bill, which seems almost certain, the exemption will last until the end of 2025.
Also exempt from VAT will be all the raw materials, intermediate products, equipment and spare parts used in the sugar industry, and the goods resulting from the industrial production of vegetable oil and soap.
The government had promised to bring down food prices by reducing VAT, and this was also a demand made by former presidential candidate Venancio Mondlane. But for most basic foodstuffs, this promise cannot be implemented because they are already zero rated and so pay no VAT.
Among the goods that have always been exempted from VAT are rice, maize and maize flour, milk, bread and salt.
(AIM)
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