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Amendments to the VAT Code and the Basic Law of the Tax System

We hereby inform the business community and other interested parties that Articles 9, 10, 12, 15, 17, 19, 10 and 21 of the Value Added Tax Code have been amended under the measures of the PAE - Economic Acceleration Stimulus Package.

It is worth to highlight the following amendments:

  1. the reduction of the tax rate from 17% to 16%;
  2. Medical, sanitary, education and professional training services will now be subject to VAT at a rate of 5%, if they are rendered by private entities. There is no right to deduction for the services subject to this rate;
  3. The exemption regarding property rental for commercial, industrial and service provision purposes, in rural areas is now repealed; and
  4. The supply of services and transmission (including the importation) of production factors for the Agriculture and Energy sectors are now covered by the exemption;

Moreover, please be informed that Law No. 15/2002 of 28 December, which approves the Basic Law of the Tax System ("LBST"), has been amended. These amendments are essentially aimed to harmonize the LBST with other legislative amendments that have occurred in the Mozambican tax system.