Mozambique’s Tax Authorities Intensify Debt Recovery Efforts in 2024

In 2024, Mozambique’s tax authorities recovered over 110 million meticais in tax debts and executed nearly 250 seizures, marking an improvement despite falling short of revenue targets. The country’s total expenditure also decreased compared to prior years, while preparations for upcoming elections have led to the adoption of a twelfths budget execution method, amid ongoing social unrest resulting in significant casualties.

In 2024, the Mozambican tax authorities recovered over 110.7 million meticais (approximately €1.6 million) from tax debts and executed nearly 250 seizures, as reported by government data. The budget execution report for the year indicated an improvement in tax debt recovery rates, with a total of 246 seizures valued at 38,377,600 meticais (around €553,000). Moreover, the increase in debt recovery relative to the previous year was also noted in collected amounts.

Despite the reported increase in recovery, the overall tax revenue for the Mozambican state remained under the target for 2024, totaling around 344.836 million meticais (€5.177 million). When compared to 2023, revenue collection fell from 91.8% of targets to 89.9%, highlighting a continued struggle to meet fiscal objectives.

Inocêncio Impissa, spokesperson for the Council of Ministers, acknowledged the tough circumstances faced in 2024 during a presentation of the Economic and Social Plan and State Budget (PESOE). He also noted that total state expenditure for the year reached just over 493.356 million meticais (€7.403 million), which is 86.9% of the planned budget, down from the previous year’s full execution.

In light of the upcoming general elections on October 9, the Mozambican government has opted to renew the 2024 State Budget in twelfths, with plans to approve the 2025 budget in the first half of 2025. An explanatory document from the Ministry of Economy and Finance outlined that spending under the PESOE 2024 will follow this twelfths principle until the new budget is enacted.

Furthermore, Mozambique has been grappling with violent social unrest since October 21 of the previous year, resulting from the post-election climate. This unrest has included protests, strikes, clashes with law enforcement, and significant casualties, including at least 357 deaths and nearly 800 injuries from gunfire, alongside extensive property damage.

In summary, Mozambique’s tax authorities have actively pursued tax debt collection in 2024, recovering significant amounts despite falling short of overall revenue targets. Moreover, the government faces fiscal challenges amidst preparations for elections and ongoing social unrest, indicating a complex economic landscape ahead. The government’s strategy to implement the budget in months showcases a need to adapt to these challenges while ensuring fiscal responsibility until the new budget is approved.

Original Source: clubofmozambique.com