Mozambique’s government has enacted a VAT exemption until 2025 for sugar, edible oils, and soaps to alleviate living costs. This measure aims to reduce prices and support the local economy, reinstating relief that was suspended in 2010. Support from business leaders emphasizes the timeliness of these initiatives amidst rising food costs and social unrest following the recent elections.
Mozambique’s government has approved a VAT exemption until December 31, 2025, on essential products such as sugar, edible oils, and soaps. This initiative, announced by President Daniel Chapo, aims to alleviate the burden of living costs on citizens by reducing prices for basic goods and stimulating the local economy. The cabinet’s decision was made during a session in Pemba, Cabo Delgado, focusing on improving living conditions for the population.
The exemption also applies to raw materials and machinery necessary for the sugar and soap industries. Inocêncio Impissa, the cabinet spokesman, highlighted that this measure marks a return to previously suspended VAT relief from 2010 for these sectors. The aim is to enable easier market access for entrepreneurs, thereby encouraging production and stabilizing prices for consumers.
The government hopes that this tax relief will maintain prices and reduce speculation, allowing citizens to afford these essential products. The proposed VAT waiver is expected to invigorate the production units by promoting local manufacturing and addressing recent price increases in essential goods, which have seen a rise of around 11% in the basic food basket according to local business assessments.
Evaristo Madime, vice-president of the Confederation of Economic Associations (CTA), expressed support for the president’s initiatives, indicating they are timely and crucial for maintaining social stability amidst rising living costs and employment challenges in the wake of recent demonstrations following the October elections.
The president had earlier indicated that the government is exploring the possibility of further tax relief on other basic necessities and intends to address fuel prices to further ease living costs. These actions reflect the government’s commitment to finding solutions to the economic challenges faced by the citizens of Mozambique.
The Mozambican government’s approval of a VAT exemption on sugar, edible oils, and soaps until December 2025 is a significant step toward alleviating the cost of living crisis. By reinstating tax relief on essential goods, the government aims to stabilize prices and enhance economic conditions for its citizens, especially in light of recent protests against high living costs. The support from business associations indicates a broader consensus on the need for these measures to promote social peace and economic wellbeing.
Original Source: clubofmozambique.com
