Mozambique’s income tax revenue rose by 4% in 2024, totaling €2.226 billion, despite lower economic growth of 1.9%. Personal and corporate taxes exceeded their annual targets, while post-election protests negatively impacted the economy, leading to a decline in GDP in the fourth quarter.
In 2024, Mozambique reported a 4% increase in income tax collections, totaling €2.226 billion, exceeding the government’s forecast despite slower than anticipated economic growth. This revenue constituted approximately 45% of all tax revenues for the country, according to State Budget implementation data.
The Personal Income Tax (IRPS) contributed €900 million, reflecting a 7% growth from 2023, achieving 96% of its annual target. This increase is attributed to effective withholding controls and timely payments to tax authorities.
Corporate Income Tax (IRPC) yielded €1,321 million, surpassing its annual target by 112.7%, with a modest growth of 2.1% year-over-year. Additionally, the Special Tax on Gaming raised €5.5 million in 2024.
Despite these tax revenue increases, Mozambique’s economy grew by only 1.9% in 2024, significantly below expectations, primarily due to post-election protests adversely affecting economic activity. The economy experienced a decline of 4.87% in the fourth quarter compared to the previous year, as documented by government reports.
Post-election unrest has persisted since the general elections in October 2024, resulting in demonstrations, violence, and over 300 fatalities. The government had initially estimated a growth of 5.5% in the GDP for the year, projecting an increase to approximately €23 billion.
In summary, Mozambique’s income tax collections saw a notable increase despite a deteriorating economic situation marked by protests and natural disasters. Personal and corporate income taxes performed well, exceeding targets, while post-election unrest severely affected overall economic growth. Mozambique’s outlook reflects a complex scenario of increased fiscal revenue amidst significant socio-political challenges.
Original Source: clubofmozambique.com
