Maputo, July 8, 2025 (Lusa) - Mozambique’s government plans to streamline tax exemptions, expand the tax base to the informal economy and introduce artificial intelligence (AI) tools to support the tax authorities, as measures to increase revenues by 2028.
"Revision and simplification of the VAT and IRPC codes [tax paid by companies], with a focus on promoting efficient exemptions and increasing tax neutrality” are measures considered priorities to implement from 2026 to 2028, included in the Medium-Term Fiscal Scenario (CFMP), which the cabinet approved on 24 June and Lusa consulted on Tuesday.
The document adds measures such as “massive updating of simplified tax regimes” and “creation of a specific regime for foreign digital services”, as well as “expansion of the tax base through formalisation of the informal economy and improvement of the tax register” or “strengthening of the Tax Administration [AT], with investments in digitisation, system interoperability and control of large companies".
The priority measures also include the “implementation of digital collection mechanisms and interoperability with payment systems”, as well as the “evaluation and rationalisation of special tax regimes and incentives, with measures to correct distortions”.
The chapter on “structural” measures defined in the document for the same period includes “promoting tax justice through more progressive taxation and a more equitable redistribution of the tax burden”, as well as “comprehensive harmonisation of the tax system, with the integration of low-taxed sectors and a review of the taxation of the digital economy” and “strengthening the analytical capacity of the AT through the introduction of artificial intelligence”.
The CFMP 2026-2028 sets out a fiscal consolidation strategy that is “based on the gradual implementation of structural reforms and fiscal policy measures aimed at strengthening domestic revenue mobilisation, improving the quality of public expenditure and debt sustainability”.
In the fight against tax evasion, the CFMP gives priority in the coming years to “strengthening the audit and inspection capacity” of the AT, “intensifying inter-institutional cooperation and information exchange with public and international institutions” and “applying effective penalties for under-invoicing, tax evasion and smuggling”.
Structural measures include the need to “develop a segmented and predictive approach to tax control, based on emerging technologies and risk profiles” and to “strengthen forensic tax analysis and real-time monitoring of high-value transactions”.
In the first year of implementing the CFMP, in 2026, the Government forecasts, based on the baseline scenario, that tax revenue will represent 21.3% of Gross Domestic Product (GDP), rising to 21.4% the following year and 21.5% in 2028.
Overall, the state will increase its revenue from 417.4 billion meticais (€5,544 billion) in 2026 (25.4% of GDP) to 492.2 billion meticais (€6.537 billion) in 2028 (25.7% of GDP).
Revenue from the exploitation of Liquefied Natural Gas (LNG), which accounts for 60% of net revenue, “should be around 0.3% of gross domestic product over the period, reflecting the gradual maturation of production and the legal framework of the Sovereign Fund,” which has been in the process of becoming operational since 2024.
PVJ/ADB // ADB.
Lusa
