In a much-anticipated development for the mining and oil exploration industry in Mozambique, the Council of Ministers approved this week an extension of benefits to districts and provinces where exploration activities take place.
The move represents the completion of measure number 8 (PAE 8) of President Nyusi’s PAE (Economic Acceleration Package) launched on August 2022 and expands the scope of a practice that was previously limited to local communities. The government’s decision, announced by Filimão Suaze, the spokesperson for the government, at the end of the Council of Ministers Session last Tuesday, aims to foster regional development by allocating a portion of the revenues generated from mining and oil production.
Expanding Economic Opportunities
Under the new measure, administrative divisions, such as districts and provinces, will now receive a 7.25% tax on mining or oil production. This initiative is designed to foster and promote the growth and prosperity of these regions by channeling financial resources toward local development projects. It complements the existing arrangement where communities receive a 2.75% share of the revenues from the exploitation of resources at the local level bringing the total benefit to 10%.
Mozambique’s decision to extend mining benefits to districts and provinces marks a significant step towards inclusive economic growth and development. By allocating a portion of mining and oil revenues to these regions, the government aims to stimulate local economies, fund vital infrastructure projects, and empower communities.
Customs Clearance and Excise Taxes
In addition to the extension of mining benefits, the government also approved several other decrees during the Council of Ministers session. One such decree pertains to the establishment of general rules for customs clearance. These rules aim to streamline and standardize the control and clearance procedures for goods, merchandise, valuables, and their respective means of transport. The rules cover all forms of international trade, including the national electronic cross-border customs system.
In addition, the government approved a decree regulating the Code of Excise Taxes, which supersedes the previous decree issued in 2019. This new regulation provides guidelines and procedures for levying specific consumption taxes. The objective is to ensure effective taxation practices while supporting economic growth and sustainability.
Improving Rail-Port Concessions
The Council of Ministers also greenlit a decree that revises the distribution of fixed and variable fees in rail-port concession contracts. The revised decree, which updates the existing framework outlined in the 2000 decree, aims to facilitate investments in the transportation and maritime sectors. By ensuring a fair distribution of revenue from variable fixed fees, the government intends to fulfill its obligations as the Granting Authority in rail-port concessions, promote regulatory compliance, and enhance treasury revenues.
The approval of additional decrees related to customs clearance, excise taxes, and rail port concessions further demonstrates the government’s commitment to improving governance, fostering trade, and maximizing economic potential. These measures are expected to contribute to Mozambique’s overall economic prosperity and elevate its position as a key player in the mining and oil sectors.