Mozambique’s income tax collections increased by 4% to €2.226 billion in 2024, despite economic growth of only 1.9%. Personal and corporate income taxes showed solid performances, driven by robust collection measures. The country faces ongoing challenges due to post-election unrest and climate issues, with the GDP forecast aiming for a 5.5% rise.
In 2024, Mozambique’s income tax collections rose 4% to €2.226 billion, exceeding government forecasts. This figure, amounting to 155 billion meticais, represents 105% of the annual target and constitutes 45% of the nation’s total tax revenue for the year. Despite economic growth falling short of expectations, income tax revenue demonstrated resilience.
Personal Income Tax (IRPS) generated 62,639 million meticais (€900 million), achieving 96% of its annual target with a 7% increase from 2023. This growth is attributed to effective source withholding controls by companies and the Civil Service due to the implementation of a new salary scale, as reported by the Ministry of Finance.
Corporate Income Tax (IRPC) collected was 91,985 million meticais (€1,321 million), marking 112.7% of the planned target for the year, with a growth of 2.1% year-over-year. Additionally, a Special Tax on Gaming contributed 387.8 million meticais (€5.5 million) to the overall tax revenue.
The economy overall expanded by a mere 1.9% in 2024, significantly lower than anticipated, influenced by post-election protests, stated Finance Minister Carla Loveira. Furthermore, there was a 4.87% year-on-year decline in GDP during the fourth quarter of 2024 due to socio-political unrest following the elections held on October 9.
The Ministry of Finance highlighted ongoing issues, including severe climate impacts from droughts and cyclones, exacerbated by post-election demonstrations. These events severely disrupted economic and social activities across Mozambique, contributing to the reported unrest which included violence and significant loss of life.
The government projected the GDP to be 1.536 trillion meticais (approximately €23 billion) in 2024, reflecting a hoped-for 5.5% growth despite the challenging circumstances. This projection emphasizes the ongoing economic difficulties the country faces alongside optimistic revenue collection figures.
Mozambique’s income tax revenue for 2024 showcased a 4% increase, demonstrating the effectiveness of tax collection measures despite economic challenges. The resilience in tax collection is notable against the backdrop of a declining economy influenced by social unrest and climate impacts. Overall, while tax revenue has outperformed expectations, the country is navigating through significant socio-economic hurdles.
Original Source: clubofmozambique.com
