Mozambique Oil & Gas: “Hydrocarbon projects tax exemptions target exploration and construction phases only” – Prime minister

The government reiterated yesterday that oil and gas projects only benefited from tax exemptions in the research and infrastructure construction phases. “During the production phase, the oil and gas industry projects pay all taxes set out in the tax regime of oil operations,” Prime Minister Carlos Agostinho do Rosário said.

In closing remarks at the end of two days of questions to the government by the deputies of the Mozambican parliament, the prime minister said that the government nevertheless acknowledged the need to adjust legislation applicable to oil operations to the dynamics of the country’s development.

“The improvement of legislation should aim to ensure the attractiveness of investment and maximise the benefits generated by these projects for the development of our economy,” he said.

Talking about the implementation of gas projects in the Rovuma basin, Carlos do Rosário said that the government’s vision safeguarded local communities, guaranteed the availability of up to 25 percent of natural gas to the domestic market in order to boost the country’s industrialisation, promoted national content through the link between large oil and gas companies and Mozambican small and medium enterprises in order to maximise the benefits of generating employment and income, and guaranteed the training and qualification of Mozambicans and the development of integrated infrastructure.

The prime minister said the government’s approach was aimed at diversifying the economy to avoid over-reliance on natural resources, particularly hydrocarbons. That is why we must continue to focus on the implementation of the four areas that catalyse the operationalisation of the government’s five-year programme, namely agriculture, energy, tourism and infrastructure, he said.

It is in this context that the government encouraged the population to remain committed to increasing production and productivity, especially in agriculture, to ensure food self-sufficiency and reduce dependence on food imports.

As agricultural marketing was one of the key factors in boosting agricultural development, the government would continue to coordinate the agricultural marketing process and introduce where necessary, through the Mozambican Grains Institute (ICM), the purchase of agricultural surpluses.

As for infrastructure, which played a decisive role in the growth of the economy, the government would continue to mobilise financial resources to accelerate the implementation of the Five-Year Programme in the sectors of roads, bridges, water supply and transport development to benefit the population throughout Mozambique.

Carlos do Rosário explained that in the implementation of the Five-Year Programme, the government counted on the participation of private entities and other development actors, including the Confederation of Economic Associations (CTA).

Meanwhile, within the framework of rationalising public spending currently in progress, the prime minister said the executive had been reducing subsidies, including those to the private sector. “It is in this context that, in agreement with the CTA, we decided to cease financial support while maintaining the objectives of the contract programme,” he said.

The government previously paid about 7.5 million meticais (US$125,000) under a contract with the CTA annually. Source: AIM