Taxationinthe Agricultural Sectorin Mozambique

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CHAPTER ONE: THE VAT

INTRODUCTION

In a study for CTA and USAID/SPEED, Hipólito Hamela identified ways in which the VAT in Mozambique may be adversely affecting the agricultural sector, which comprises approximately 25% of GDP in Mozambique (Hamela, 7). In particular, he discovered an issue arising from purchases from farmers with no taxpayer identification number, or NUIT.

I was tasked with analyzing the effects of various exemptions and zero-rating on agricultural production in Mozambique, as well as other tax issues which might be impacting agricultural costs, including the “taxa liberatoria”, an income withholding tax.

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