In 2024, Mozambique’s income tax collections rose by 4% to €2.226 billion, exceeding forecasts. Personal income tax grew by 7%, while corporate tax reached 112.7% of planned targets. Economic growth was sluggish at just 1.9%, impacted by post-election protests and climate challenges.
In 2024, Mozambique experienced a 4% increase in income tax collections, reaching €2.226 billion. This figure exceeded government forecasts despite the economy growing at a lesser rate than anticipated. According to data from the State Budget implementation, this amount constitutes nearly 105% of the projected annual target, representing 45% of total tax revenues in the country for the year.
Personal Income Tax (IRPS) contributed significantly, with collections totaling 62,639 million meticais (€900 million), achieving 96% of the annual target and a 7% increase from 2023. This growth results from effective management of withholdings at source and payments by both companies and the Civil Service, as noted by the Ministry of Finance.
In relation to Corporate Income Tax (IRPC), it amounted to 91,985 million meticais (€1.321 million), representing 112.7% of the annual forecast and realizing a growth of 2.1% over the year. Additionally, the Special Tax on Gaming contributed 387.8 million meticais (€5.5 million) in revenue for 2024.
The economic growth of Mozambique was a modest 1.9% in 2024, which is significantly lower than expected. Minister of Finance Carla Loveira indicated that this was affected by post-election demonstrations and protests. The final quarter of 2024 saw the economy contract by 4.87% compared to the previous year, resulting from various disruptions.
The report from the Ministry of Finance highlighted that the adverse effects included climate change challenges, specifically severe droughts and cyclones, along with the disturbances linked to election outcomes. Following the general elections of October 9, widespread protests and civil unrest arose, leading to significant societal impacts and over 300 fatalities. The government initially projected a GDP growth of 1.536 trillion meticais (approximately €23 billion) for the year, forecasting a 5.5% increase.
In summary, Mozambique’s income tax collections saw a moderate increase in 2024, marked by notable contributions from both personal and corporate income taxes. However, the nation faced substantial economic challenges, including lower-than-expected growth and social unrest following recent elections. The adverse effects of climate change further exacerbated these issues, adversely impacting economic stability.
Original Source: clubofmozambique.com
