Mozambique: Businesses call for 5-year VAT exemption on sugar, soap and edible oil
Mozambican business leaders have urged the government to extend the VAT exemption on sugar, edible oils, and soaps from one to five years. This would reduce imports, boost local production, and lower prices. The move aims to make products more affordable, benefiting sectors like poultry farming, energy, and transport, while promoting a competitive, resilient economy.
Mozambican businesspeople yesterday called for the extension of the VAT exemption on sugar, edible oils and soaps period from one to five years, to reduce imports and increase national production.
“This measure aims to boost the development of the production chain at a national level, reduce dependence on imports and make local products more competitive,” vice-president of the Confederation of Economic Associations (CTA) of Mozambique, Maria de Assunção Abdula, said.
At issue is the recent approval by the Mozambican government of the VAT exemption until the end of the year on sugar, edible oils and soaps, as well as raw materials and machinery in these sectors, to alleviate the cost of living, a measure that still requires parliamentary approval.
Speaking during a CTA seminar in Maputo on Thusrday, Maria de Assunção Abdula explained that by extending the exemption period to five years, the country would be able to boost local production of these products, making them more affordable, as well as benefiting other sectors such as poultry farming, energy and transport.
“With the VAT exemption and the integration of soybeans into the production chain, the price of cooking oil could fall from 245.56 meticais (€3.54) to 141 meticais (€2.00),” she said.
For the vice-president of the CTA, encouraging local content through public spending and industrialisation via tax policy would contribute to a more inclusive and competitive business environment, also promoting the development of an economy that is “robust, resilient and less dependent on imports”.
On February 25, President Daniel Chapo described the approval of a bill “aimed at extending the exemption period” for the transfer of sugar, cooking oils and soaps, raw materials, intermediate products, parts, equipment and components by the national sugar and soap industry, as a measure to “reduce the cost of living”.
According to the government, the decision involves “relieving not only the factors of production”, but will also allow “businesspeople, factories and other production units of these products to introduce or reintroduce these products with some ease for the benefit of the population”.
“Naturally, what is expected is that, if VAT is implemented on these products, there will at least be a maintenance of prices and there will be no speculation,” Inocêncio Impissa, spokesperson for the Council of Ministers, remarked after the February cabinet meeting which approved the measure.
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Source : Club Of Mozambique
