The Mozambican parliament on Thursday passed the first reading of a government bill amending the tax codes, which, it said, was to simplify the country’s tax system and make it more socially just.
Under the bill presented by Finance Minister Manuel Chang, anyone who earns up to 36 times the statutory monthly minimum wage in a year is exempt from income tax. The previous limit was 24 times the minimum wage. The current minimum wage is 1,645 meticais a month and annual incomes of up to 59,220 meticais (slightly less than 2,500 US dollars) will pay no tax.
The bill says on higher incomes tax rates begin at 10 per cent and rise to 32 per cent. Only incomes in excess of 1,512,000 meticais (62,500 dollars) a year are taxed at the highest rate.
Nobody earning 100,000 meticais or less a year will be obliged to complete an annual declaration of income. These changes mean that the vast majority of workers on wages will pay no income tax.
But for the first time, interest earned on deposit accounts, and on income from securities quoted on the Mozambican stock exchange will be taxed at a rate of 10 per cent, but pensions will be entirely exempt from income tax.