Mozambique’s Tax Authorities Enhance Debt Recovery Amid Fiscal Challenges

Mozambique’s tax authorities have recovered over 110.7 million meticais in 2024 and executed nearly 250 seizures. Despite these efforts, total tax revenue fell short of targets, reaching only 89.9% of projections. The government is adjusting its budget approach in light of upcoming elections, amidst ongoing social unrest marked by violent protests.

In 2024, the Mozambican tax authorities have notably enhanced their efforts in tax debt recovery, recovering over 110.7 million meticais, equivalent to approximately €1.6 million. The authorities executed 246 seizures totaling around 38.4 million meticais (about €553,000) as part of their enhanced recovery operations. Despite these accomplishments, tax revenue remained below the set target for the year, totaling around 344.8 billion meticais (approximately €5.2 billion).

The total revenue collection reached only 89.9% of the projected target in 2024, a decline from the previous year’s achievement of 91.8%. Inocêncio Impissa, spokesperson for the Council of Ministers, acknowledged the difficulties faced throughout the year, attributing this shortfall to various “countless adversities and challenges.” He reported that total government expenditure amounted to over 493.4 billion meticais (€7.4 billion), accounting for 86.9% of the budget, contrasting with 100% execution in the previous year.

Given the upcoming general elections on October 9, the government has decided to adopt a renewed budget plan based on twelfths until the 2025 budget can be approved. The Ministry of Economy and Finance clarified that the operational expenses as per the Economic and Social Plan of the State Budget (PESOE) 2024 must adhere to this guideline until the new budget is sanctioned.

Amid these fiscal adjustments, Mozambique has been enduring severe social unrest since October 21 of the previous year, exacerbated by violent demonstrations and strikes which have resulted in over 357 fatalities, approximately 800 gunshot injuries, and widespread looting and destruction of both public and private property.

In conclusion, while Mozambique’s tax authorities have made strides in debt recovery through increased seizures, overall tax revenue has declined below projections for 2024. The government’s financial management during challenging times has led to a budgetary strategy focused on twelfths due to impending elections. Concurrently, the nation faces significant social turmoil, compounding the complexities of its economic situation.

Original Source: clubofmozambique.com