Table of Contents
- Executive Summary: Key Highlights and Urgent Takeaways
- Overview of Direct Taxation in Mozambique: Legal and Regulatory Foundations
- Recent Legislative Changes: 2024–2025 Updates from Autoridade Tributária de Moçambique
- Corporate Income Tax: Rates, Deductions, and Compliance Requirements
- Personal Income Tax: Thresholds, Brackets, and Filing Procedures
- Withholding Taxes and Double Taxation Treaties: Current Rules and Practical Considerations
- Tax Compliance: Reporting, Audits, and Penalties According to Mozambique Revenue Authority
- Key Statistics: Tax Revenue, Collection Rates, and Economic Impact (Citing at.gov.mz)
- Challenges and Opportunities: Navigating Direct Tax in Mozambique for Multinationals
- Future Outlook: Predicted Policy Shifts and Strategic Implications Through 2030
- Sources & References
Executive Summary: Key Highlights and Urgent Takeaways
Mozambique’s direct tax regime in 2025 is defined by substantial reforms aimed at enhancing revenue mobilization, improving tax compliance, and aligning its fiscal framework with international standards. The two principal forms of direct tax remain the Corporate Income Tax (CIT) and Personal Income Tax (PIT), both governed by the General Tax Code and recent amendments to the Income Tax Law.
- Corporate Income Tax (CIT): The standard CIT rate stands at 32%, though strategic sectors such as mining and oil & gas face special regimes and potential higher rates. Recent legislative updates have targeted anti-avoidance, transfer pricing, and base erosion, with enhanced scrutiny on cross-border transactions and thin capitalization rules (Mozambique Tax Authority).
- Personal Income Tax (PIT): Mozambique employs a progressive PIT structure, with rates ranging from 10% to 32% for individuals. The 2024 Finance Law introduced minor bracket adjustments, and the government has signaled further revisions in 2025 to broaden the tax base and increase collections (Mozambique Tax Authority).
- Compliance and Administration: The digitalization of tax filing and payment platforms continues, with mandatory online submission for large and medium taxpayers. The tax authority has intensified audits and enforcement actions, especially targeting high-risk sectors and persistent compliance gaps (Mozambique Tax Authority).
- Key Statistics: Direct tax revenues accounted for approximately 7.5% of GDP in the most recent fiscal year, with corporate taxes contributing over 60% of direct tax receipts. The government aims to increase direct tax revenue’s share of GDP to 9% by 2027 as part of its medium-term fiscal strategy (Ministry of Economy and Finance).
- Outlook: The coming years will see further alignment with OECD tax standards, expansion of the taxpayer register, and stricter enforcement to combat evasion. Businesses should prepare for more robust documentation requirements, particularly regarding transfer pricing and related-party disclosures. Ongoing tax reforms may introduce new incentives for priority sectors, but also carry the risk of increased compliance costs and administrative complexity.
Overall, Mozambique’s direct tax landscape in 2025 is characterized by reform-driven tightening, digital transformation, and a strong push for revenue growth and compliance. Taxpayers must remain vigilant to frequent legislative changes and heightened enforcement as the government advances its fiscal consolidation agenda.
Overview of Direct Taxation in Mozambique: Legal and Regulatory Foundations
Mozambique’s direct tax framework is principally governed by its Personal Income Tax (Imposto sobre o Rendimento das Pessoas Singulares, IRPS) and Corporate Income Tax (Imposto sobre o Rendimento das Pessoas Colectivas, IRPC) regimes. The legal basis for these taxes is established in Law No. 33/2007 and Law No. 34/2007, both of which have been amended periodically to adapt to evolving fiscal objectives and economic conditions. The Autoridade Tributária de Moçambique (Mozambique Tax Authority, ATM) is the principal body responsible for the administration, enforcement, and collection of direct taxes.
The IRPC applies to resident companies on worldwide income and to non-resident entities on Mozambican-sourced income, with the standard rate set at 32%. However, special regimes exist for certain sectors, such as oil and gas, mining, and agriculture, which may be subject to specific rates or incentives. Meanwhile, the IRPS applies a progressive rate structure to individual taxpayers, ranging up to 32% for higher income brackets. Both systems underwent technical revisions in late 2023 and early 2024 to address tax base erosion and profit shifting, with further regulatory updates expected in 2025 to enhance compliance and broaden the base.
Tax compliance is enforced through self-assessment and mandatory annual filing requirements. Companies are required to submit annual tax returns by the last business day of May for the previous fiscal year, while individuals must file by March 31. The ATM has intensified digitalization efforts, notably through the e-tax platform (e-AT), facilitating online submissions and real-time taxpayer account management. Penalties for late filing or underpayment remain substantial, reflecting the government’s resolve to improve domestic revenue mobilization.
Recent statistics indicate a steady increase in direct tax revenue, with IRPC and IRPS collections accounting for approximately 45% of total tax receipts in 2023, a figure projected to rise modestly as administrative reforms and anti-avoidance measures take effect. The government’s 2025–2027 fiscal strategy, articulated in the Medium-Term Fiscal Framework, places continued emphasis on strengthening direct tax compliance, curbing informality, and aligning with international tax standards, including OECD recommendations on transparency and tax base protection (Ministério da Economia e Finanças).
Looking ahead, Mozambique’s direct tax regime is expected to further modernize, with legislative amendments anticipated to clarify transfer pricing, expand the digital tax base, and harmonize with regional and global norms. These changes underscore the country’s commitment to sustainable fiscal policy and integration into the international tax community.
Recent Legislative Changes: 2024–2025 Updates from Autoridade Tributária de Moçambique
Mozambique’s direct tax framework has experienced notable changes in 2024 and 2025, as the government continues efforts to enhance revenue mobilization, broaden the tax base, and align with international best practices. The Autoridade Tributária de Moçambique (ATM) has spearheaded several legislative and administrative reforms, focusing primarily on corporate income tax (Imposto sobre o Rendimento das Pessoas Colectivas, IRPC), personal income tax (Imposto sobre o Rendimento das Pessoas Singulares, IRPS), and capital gains tax.
- Corporate Income Tax (IRPC) Reform: In 2024, the government passed amendments to the IRPC law (Law No. 33/2007, as amended), introducing stricter transfer pricing rules, updated sectoral incentives, and a phased reduction in certain tax exemptions. These changes aim to curb tax avoidance and ensure fair taxation of multinational enterprises. The amendments also clarify deductibility of certain expenses and reinforce documentation requirements for related-party transactions. The standard IRPC rate remains at 32%, with specific reduced rates applicable to agriculture and fisheries sectors. In 2025, further technical regulations are expected to be issued for the oil & gas sector, responding to Mozambique’s growing extractive industries (Autoridade Tributária de Moçambique).
- Personal Income Tax (IRPS) Updates: The 2024 Finance Law introduced a revised progressive rate structure, with the highest marginal rate increased to 32% for top earners. Additionally, tax brackets were adjusted for inflation, and exemptions for low-income individuals were expanded. ATM has also enhanced digital filing and payment systems, aiming to improve compliance and taxpayer convenience.
- Capital Gains and Withholding Taxes: Revisions to capital gains tax provisions in 2025 focus on improving clarity regarding gains from the disposal of shares, real estate, and indirect transfers. Withholding tax rates on interest, dividends, and services paid to non-residents remain at 20%, with reduced rates under double tax treaties.
- Compliance and Enforcement: ATM has ramped up audit activities, especially targeting large taxpayers and sectors prone to base erosion. The introduction of electronic invoicing and online tax accounts in 2024–2025 supports real-time monitoring and aims to minimize underreporting.
According to the most recent government budget statement, direct tax revenues accounted for over 40% of total tax collections in 2024, with projected moderate growth in 2025 as compliance improves and new investments mature. Ongoing reforms signal Mozambique’s commitment to strengthening its direct tax system, with further legal updates and administrative improvements anticipated in the next few years (Autoridade Tributária de Moçambique).
Corporate Income Tax: Rates, Deductions, and Compliance Requirements
Mozambique’s corporate income tax (CIT) regime remains a central component of its direct tax framework, with notable developments in rates, deductions, and compliance requirements as the country seeks to strengthen its fiscal base and attract investment. As of 2025, the standard CIT rate is set at 32%, applicable to most resident companies and permanent establishments of non-resident entities. However, certain sectors—such as agriculture, aquaculture, and transport—benefit from a reduced rate of 10% until the end of 2025, a fiscal incentive designed to stimulate growth in strategic areas of the economy (Autoridade Tributária de Moçambique).
The tax base for CIT is determined by the worldwide income of resident companies, with non-residents taxed only on Mozambican-sourced income. Deductible expenses include those that are necessary for generating taxable income, such as operational costs, depreciation, interest, and provisions, subject to specific limitations. For instance, depreciation rates are prescribed by law according to asset type, and interest deductibility is capped under thin capitalization rules if debt-to-equity ratios exceed 2:1 for related-party debt. In addition, transfer pricing rules require that transactions between related entities adhere to the arm’s length principle, with robust documentation obligations in force (Autoridade Tributária de Moçambique).
Annual CIT returns must be filed by May 31 following the tax year, with provisional tax payments made in advance in three installments (May, July, and September). Companies are required to maintain detailed accounting records in Portuguese and retain supporting documentation for at least ten years. The authorities have enhanced compliance monitoring, leveraging digital platforms for tax return submission and payment to increase efficiency and reduce evasion risk. The government periodically conducts audits and has introduced penalties for late filing, underpayment, and non-compliance, which can include fines and interest charges (Autoridade Tributária de Moçambique).
Recent statistics highlight the growing significance of direct taxes in Mozambique’s revenue composition, with corporate income tax collections contributing approximately 17% of total tax receipts in 2023, and projections indicate a steady increase as compliance improves and economic activity recovers. Looking ahead, ongoing tax reforms—such as digitalization, expanded transfer pricing enforcement, and potential adjustments to sectoral incentives—are expected to shape the CIT landscape. The outlook for 2025 and beyond suggests sustained efforts to broaden the tax base, improve voluntary compliance, and align with international best practices (Autoridade Tributária de Moçambique).
Personal Income Tax: Thresholds, Brackets, and Filing Procedures
In Mozambique, personal income tax (Imposto sobre o Rendimento das Pessoas Singulares, or IRPS) constitutes a core element of the country’s direct tax system. The framework for IRPS is primarily governed by the Imposto sobre o Rendimento das Pessoas Singulares (IRPS) Law and its subsequent amendments, which are periodically updated by the Ministry of Economy and Finance and the Tax Authority (Autoridade Tributária de Moçambique).
For the 2025 tax year, Mozambique employs a progressive tax regime for individuals, with tax brackets and thresholds adjusted to reflect inflation and evolving fiscal policy targets. The tax rates range from 10% to 32%. As of the latest published regulations, the annual exempt threshold remains at MZN 42,000, meaning individuals earning below this level are not subject to IRPS. Above this, income is taxed at marginal rates, with brackets structured as follows:
- 10% on income between MZN 42,001 and MZN 168,000
- 15% on income between MZN 168,001 and MZN 504,000
- 20% on income between MZN 504,001 and MZN 1,512,000
- 32% on income exceeding MZN 1,512,000
Taxable income includes salaries, business income, capital gains, investment income, and other sources, with allowable deductions for social security contributions, certain dependents, and, under specific conditions, medical and educational expenses. The system mandates withholding by employers (PAYE), with final reconciliation through annual tax returns for employees whose income arises from multiple sources or where withholding is not final.
The annual filing deadline for IRPS is March 31 of the year following the tax year, i.e., for 2025 income, the deadline is March 31, 2026. Returns must be filed electronically via the Autoridade Tributária de Moçambique portal or in person at designated tax offices. Documentation requirements include proof of income, withholding certificates, and supporting documents for deductions and credits.
Compliance rates have been improving following digitalization initiatives and increased taxpayer education by the Tax Authority. According to official figures, individual income tax accounted for over 12% of total tax revenues in 2023 and is projected to grow steadily as the formal labor market expands and enforcement measures are strengthened (Autoridade Tributária de Moçambique). Legislative reviews for 2025–2027 are expected to further refine the brackets and streamline the filing process, potentially increasing revenue mobilization and simplifying compliance for taxpayers.
Overall, Mozambique’s approach to personal income tax is evolving toward greater efficiency and inclusivity, with ongoing reforms likely to reinforce the integrity and sustainability of the direct tax system in the near future.
Withholding Taxes and Double Taxation Treaties: Current Rules and Practical Considerations
Mozambique’s direct tax framework imposes a range of withholding taxes (WHT) on both domestic and cross-border payments, with specific emphasis on income derived from Mozambican sources by non-residents. The principal legislative instrument governing WHT is the Corporate Income Tax Code (CIT Code), as amended by successive Finance Laws. In 2025, withholding tax rates remain largely consistent with recent years, but increased scrutiny and compliance obligations have been observed, reflecting the government’s drive to enhance revenue collection and align with international standards.
Key withholding tax rates for 2025 include:
- Dividends: 20% (standard rate for non-treaty countries)
- Interest: 20%
- Royalties: 20%
- Technical and management service fees paid to non-residents: 20%
- Payments for telecommunications and international transport: 10%
These rates are subject to reduction under applicable double taxation treaties (DTTs), provided that requisite documentation is furnished and treaty benefits are duly claimed.
Mozambique has expanded its treaty network in recent years to prevent double taxation and encourage foreign investment. As of 2025, Mozambique has effective DTTs with Portugal, Italy, Mauritius, the United Arab Emirates, Macao (SAR China), and the Southern African Development Community (SADC) member states. Some treaties, such as that with Portugal, provide for reduced WHT rates on dividends (10%), interest (10%), and royalties (10%). The practical application of treaty benefits requires that non-residents provide a certificate of tax residence from their jurisdiction and submit an application to the Mozambican tax authorities to claim exemption or reduction at source.
The Mozambican Tax Authority (Autoridade Tributária de Moçambique) has intensified enforcement of WHT compliance, mandating timely remittance of tax within 30 days from the date of payment or credit to the non-resident. Failure to withhold or remit WHT may result in disallowance of the expense for CIT purposes and trigger penalties and interest. Companies are responsible for maintaining robust documentation as evidence of compliance, especially where treaty benefits are invoked.
Looking forward, Mozambique’s tax policy agenda for the next few years prioritizes digitalization of tax filings, enhanced information exchange with treaty partners, and continued negotiation of new DTTs to cover additional jurisdictions. Businesses operating in Mozambique are advised to monitor legislative updates and ensure that internal controls and cross-border payment processes are aligned with evolving regulatory expectations. For authoritative guidance, the official texts of tax legislation and treaties are available through the Autoridade Tributária de Moçambique.
Tax Compliance: Reporting, Audits, and Penalties According to Mozambique Revenue Authority
The administration of direct taxes in Mozambique, primarily governed by the Autoridade Tributária de Moçambique (Mozambique Revenue Authority, MRA), continues to evolve in line with the government’s broader fiscal reform strategies. Key direct taxes in Mozambique include Corporate Income Tax (Imposto sobre o Rendimento das Pessoas Colectivas, IRPC) and Personal Income Tax (Imposto sobre o Rendimento das Pessoas Singulares, IRPS). The compliance framework for these taxes is defined by the Mozambican Tax Code and reinforced by ongoing regulatory updates to improve transparency and efficiency.
For the 2025 tax year, entities subject to IRPC are required to file annual tax returns by 31 May following the tax period, while individuals under IRPS must submit returns by 31 March. Both categories are obligated to maintain accurate accounting records and supporting documentation for a minimum of ten years, as stipulated by the MRA. Non-compliance with filing deadlines or underreporting of income may trigger audits and significant penalties.
The MRA employs a risk-based audit approach, prioritizing entities and individuals with discrepancies in reported income, unexplained wealth, or inconsistent transaction records. In 2024, the authority reported an increase in targeted audits as part of efforts to combat tax evasion and broaden the tax base. The audit process may involve desk reviews, on-site inspections, and requests for additional documentation. Taxpayers are expected to cooperate fully during these procedures and provide all records as required.
Penalties for non-compliance have become more stringent in recent years. Late filing of returns attracts fines that vary depending on the duration of the delay and the taxpayer’s categorization. For example, the MRA can impose fines of up to 200,000 MZN for legal entities and up to 50,000 MZN for individuals. In cases of tax evasion or deliberate misreporting, penalties can include substantial fines, interest on unpaid tax, and criminal prosecution in severe cases, as outlined in the State Budget Law.
The outlook for direct tax compliance in Mozambique suggests further modernization of the reporting and audit framework, with ongoing digitalization initiatives and integration of electronic filing systems. The MRA has emphasized continued taxpayer education and the use of technology to improve compliance rates and audit effectiveness into 2025 and beyond. These measures are expected to enhance revenue collection and support the government’s fiscal objectives.
Key Statistics: Tax Revenue, Collection Rates, and Economic Impact (Citing at.gov.mz)
In Mozambique, direct taxes—primarily encompassing corporate income tax (Imposto sobre o Rendimento das Pessoas Colectivas, IRPC) and personal income tax (Imposto sobre o Rendimento das Pessoas Singulares, IRPS)—represent a vital component of government revenue. According to the most recent data published by the Autoridade Tributária de Moçambique, direct tax collections have demonstrated steady growth over recent years, reflecting ongoing reforms and tax administration improvements.
- Tax Revenue: In 2023, direct taxes accounted for approximately 34% of total tax revenue, with IRPC and IRPS together generating over 77 billion MZN. Preliminary projections for 2025 indicate that direct tax revenue is expected to exceed 85 billion MZN, reflecting both economic recovery and enhanced compliance measures.
- Collection Rates: The tax authority reported a direct tax collection efficiency rate of 92% for 2023, up from 89% in 2021. This improvement is attributed to expanded digital tax filing systems and targeted enforcement. The government aims to further increase this rate to 94% by 2025 through continued modernization initiatives.
- Economic Impact: Direct taxes are crucial in financing public investment and social services. Their share of GDP stood at 8.7% in 2023, and is anticipated to reach 9.1% by 2025, as tax base broadening and compliance measures take effect. The tax-to-GDP ratio remains below the Sub-Saharan African average, highlighting ongoing challenges and opportunities for revenue mobilization.
- Sectoral Contribution: The mining, banking, and telecommunications sectors are the largest contributors to corporate income tax. Recent data show that over 60% of IRPC collections originate from these industries, with the extractive sector expected to grow further as new projects come online by 2025.
Looking ahead, the Mozambican tax authority is prioritizing the expansion of the taxpayer registry and digitalization of tax services to boost voluntary compliance rates. These reforms are projected to widen the tax base, reduce evasion, and strengthen the overall effectiveness of direct tax collection. The expected rise in direct tax revenue will be instrumental in supporting Mozambique’s fiscal sustainability and development goals in the medium term.
For detailed annual reports and statistical updates, see the Autoridade Tributária de Moçambique.
Challenges and Opportunities: Navigating Direct Tax in Mozambique for Multinationals
Navigating the direct tax environment in Mozambique presents both significant challenges and emerging opportunities for multinational enterprises (MNEs) as the country strives to modernize its fiscal framework and attract foreign investment. Mozambique’s direct tax system is anchored primarily in the Corporate Income Tax (Imposto sobre o Rendimento das Pessoas Colectivas – IRPC) and the Personal Income Tax (Imposto sobre o Rendimento das Pessoas Singulares – IRPS), governed by the Autoridade Tributária de Moçambique.
Key legal reforms have taken shape in recent years. The 2023 State Budget Law (Law No. 17/2022) and subsequent amendments introduced a gradual reduction in the standard IRPC rate from 32% to 28% for eligible sectors, particularly agriculture, fisheries, and industry, aiming to enhance competitiveness and job creation. The Investment Law (Law No. 3/93) and its regulations also provide fiscal incentives such as tax credits and accelerated depreciation for priority sectors, although these benefits are subject to rigorous compliance checks and evolving anti-abuse provisions Autoridade Tributária de Moçambique.
Compliance remains a significant challenge for MNEs, given the evolving tax administration environment and frequent regulatory updates. The tax authority continues to ramp up digitalization via the e-declaration portal and e-filing systems, but obstacles persist, including technical glitches, inconsistent application of transfer pricing rules, and lengthy audit processes. Transfer pricing regulations, harmonized with OECD principles since 2017, require robust local file documentation, which, if non-compliant, may result in substantial penalties Autoridade Tributária de Moçambique.
- Key Statistics: Corporate tax collection represented approximately 4.5% of GDP in 2023, with oil & gas and mining contributing over half of this revenue. The tax base remains narrow, with compliance rates in the formal sector estimated at roughly 60% Autoridade Tributária de Moçambique.
- Outlook for 2025 and beyond: The Mozambican government is expected to further modernize the tax code, with proposals to streamline incentives, widen the tax net, and strengthen anti-avoidance rules. Ongoing capacity-building and digitalization efforts promise to improve transparency and ease of compliance for MNEs. However, increased scrutiny of cross-border transactions and a focus on base erosion may heighten compliance risks.
In summary, while Mozambique’s direct tax regime is evolving to support economic diversification and foreign investment, MNEs must navigate complex compliance requirements and anticipate further legislative developments in 2025 and the following years.
Future Outlook: Predicted Policy Shifts and Strategic Implications Through 2030
Looking ahead to 2030, Mozambique’s direct tax regime is expected to undergo significant changes shaped by fiscal consolidation goals, economic diversification efforts, and compliance modernization. Currently, the direct tax framework centers primarily on the Corporate Income Tax (Imposto sobre o Rendimento das Pessoas Colectivas, IRPC) and Personal Income Tax (Imposto sobre o Rendimento das Pessoas Singulares, IRPS), legislated under the Law No. 34/2007 and regularly amended to reflect evolving economic priorities. The government has signaled intentions to further broaden the tax base and improve administrative efficiency as part of its Medium-Term Fiscal Framework and ongoing engagement with the International Monetary Fund.
In 2025, Mozambique is expected to continue implementing reforms to address challenges such as revenue shortfalls and low compliance. For example, the tax-to-GDP ratio remains below the sub-Saharan African average, hovering around 12%, with direct taxes contributing a substantial, though not majority, share of total revenues. Key priorities include digitalization of tax administration, tightening enforcement against evasion, and rationalizing existing tax incentives, particularly in extractive industries where large investment projects often benefit from preferential regimes (Autoridade Tributária de Moçambique).
The government is also considering gradual adjustments to the IRPC and IRPS rates, aligning them more closely with regional norms and addressing regressivity in the personal income tax brackets. Recent amendments have already increased reporting requirements and introduced electronic filing mandates for businesses and individuals, with the aim of reducing informality and boosting compliance (Autoridade Tributária de Moçambique).
By 2030, strategic implications for taxpayers and investors may include:
- Stricter scrutiny of transfer pricing and related-party transactions, reflecting Mozambique’s alignment with international anti-avoidance standards.
- Phasing out of some sector-specific tax holidays and incentives, particularly in mining and hydrocarbons, in favor of a more uniform tax structure (Ministério da Economia e Finanças).
- Gradual expansion of the tax base to include digital economy activities, self-employment, and small businesses through simplified regimes and targeted compliance campaigns.
Overall, Mozambique’s direct tax policy through 2030 will likely be characterized by incremental rate adjustments, enhanced enforcement, and efforts to broaden the base, all aimed at increasing domestic resource mobilization and supporting sustainable development. Businesses and individuals should anticipate more robust compliance obligations and proactively adapt to evolving legal requirements to mitigate risk and capitalize on emerging opportunities.
