Mozambique: “Megaprojects tax contribution falls 62.4% in 2018” – Tax Authority

The contribution to Mozambique state coffers of mega-projects operating in the extractive industry sector amounted to 14,440 million meticais last year, corresponding to 6.8% of the total revenue collected by the State in 2018 (211.9 billion meticais), and a fall of 62.4% compared to the 2017 figure.

The decline was due to the negative performance of projects in the sectors of energy production, oil exploration and exploitation, and mineral resources, which registered drops of 40.2%, 78.4% and 23.1% respectively, the Mozambique Tax Authority indicates.

In numerical terms, major energy projects injected 3.4 billion meticais into the public coffers, against 5.6 billion meticais from mining exploration and 4.1 billion meticais from mineral resources.

Contrary behaviour was observed in the contribution of remaining groups of this sector, which grew by 27.1% between 2017 and 2018.

Price performance

The price of the main mega-project export products showed a mixed performance in the period under analysis, according to the International Monetary Fund assessment (IMF), reflected in the 2018 Economic and Social Plan report.

The IMF noted a trend of rising prices for Mozambique’s main export commodities, with the exception of natural gas and thermal coal prices.

Natural gas and coal registered posted declines in the price on the international market in 2018, at US$3.2 and US$64.5, respectively, against US$5 and US$85.7 in 2017, with a negative impact on export earnings from exporting countries such as Mozambique.

According to the IMF, the average price of crude oil in the international market stood at US$71.5 per barrel during the period under review, an increase of US$15.8 on the average price of US$ 55.7 per barrel in 2017.source: O Pais; by Edson Arante