Donors Pledge 5.8 Million Dollars to Tax Authority

6 June 2011

Maputo — Donors to the Common Fund to support the Mozambique Tax Authority (AT) will disburse slightly more than 5.8 million US dollars to assist with reforms in the AT this year.

The grant of this sum was formalized on Monday through a memorandum of understanding signed by Finance Minister Manuel Chang and the German Ambassador, Ulrich Klockner, representing the partners of the AT Common Fund.

The Monday agreement extends by a year the memorandum signed in 2007 to implement the Tax Reform Programme up to 2010. That memorandum is expected to be replaced by a new document next year, covering the period 2012-2014.

Speaking after the signing ceremony, Chang said he felt encouraged by the “excellent results” achieved in implementing tax and customs policy, particularly the increase in revenue collected.

“The state budget has been revised, increasing by almost 5.9 billion meticais (about 192 million US dollars) the amount of state revenue to be collected in 2011”, said the Minister. The original budget, passed by parliament in December, set a revenue target of 73.3 billion meticais, but the revised budget, passed last month, increased this to 79.2 billion.

This raised the ratio of state revenue to GDP from 19.6 to 20.8 per cent, “a target which in itself is very challenging”, Chang admitted. Nonetheless he was convinced that it could be met.

Revenue raised in the first five months of the year reached 32.13 billion meticais – which was a 1.6 per cent increase on the target figure of 31.63 billion meticais, and 40.6 per cent of the revenue planned for the entire year in the revised budget.

For his part, Klockner said the donors to the AT Common Fund are satisfied at the progress made by the Mozambican government in tax collection.

“Mozambique has made great progress in recent years in generating its own revenue, and the targets set in this area have always been exceeded”, said the Ambassador.

The other donors supporting this Common Fund are Belgium, Norway, Britain and Switzerland.

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