Mozambique decides to keep sugar and edible oil VAT free till December

15-May-2025 06:04 PM

Maputo. Mozambique’s parliament has unanimously approved the extension of the value added tax (VAT) exemption on the trade of sugar, edible oil, and soap until 31 December 2025.

The decision, which includes the exemption of VAT on raw materials and machinery used in the production of these goods, was also supported by all relevant parliamentary committees.

The Finance Minister of Mozambique stated that the extension of the VAT exemption was necessary to support the national economy.

By lowering production costs, the government expects these essential products to become more affordable, which in turn could boost demand and consumption.

This move is aimed at strengthening the purchasing power of ordinary citizens, who are currently struggling with the impact of inflation.

Although the government will incur a revenue loss of over two billion meticais due to the VAT exemption, it is prepared to absorb this loss in order to protect the interests of the public.

Mozambique continues to rely heavily on imports for its supply of edible oil, sugar, and soap, due to insufficient domestic production.

However, the government is actively promoting local manufacturing and offering incentives to reduce this dependence.

The exemption of VAT on raw materials and machinery used in the production of sugar and edible oil is expected to be a significant step toward achieving self-reliance.