Introduces fiscal measures to promote growth and improve the business environment

30 Dec 2022

The Government of Mozambique introduced changes to the Corporate Income Tax Code through Law 20/2022, gazetted on 30 December 2022. The law includes the following fiscal incentive measures: - Reduction of the corporate tax rate for agriculture, aquaculture and urban transport from 32% to 10%; - Reduction of the withholding tax rate from 20% to 10% on payments to foreign entities providing services to national agricultural companies; - Elimination of the withholding tax on interest from external financing for agricultural projects; - Creation, within the next three years, of tax incentives for new investments in the agriculture, agro-processing, manufacturing, tourism and urban transport sectors. The new incentives involve accelerated depreciation (for half of the useful life) for investments made in facilities and equipment related to a company’s production activity, provided it creates at least 20 permanent jobs.

The changes are part of the Economic Acceleration Stimulus Package announced by the Government on 9 August 2022.

The amendment entered into force on 1 January 2023 and will remain valid until 31 December 2025.