Mozambique announces VAT exemptions as consumers struggle with costs

VAT on goods such as sugar, edible oils and soaps will not be in force for the remainder of 2025. The exemption also applies to raw materials, intermediate products, parts, equipment and components used by businesses operating in the national sugar and soap industries. 

“The move aims to reduce living costs and support economic growth. President Daniel Chapo explained that these measures are intended to improve citizens’ daily lives and help businesses by easing access to key products,” reports the radio station Channel Africa. 

Said the President in a message published on his official account on the social media platform X: “As we have always said, it is our primary duty to serve our people, improve their living conditions and, together, work to boost our economy.” 

Decision made by country’s cabinet 

The decision was taken following a cabinet meeting held at Pemba in the north of the country. 

Mozambique’s standard VAT rate is 16% – reduced from 17% in 2023 – although there are certain selected items that are subject to a reduced rate of 5%. 

According to a report by news agency Lusa, Mozambique’s main business association said that the president’s intention to go ahead with measures to reduce the cost of living was “wise and timely” and would contribute to “social peace” in the country.  

The country has struggled with social unrest since last October’s general elections. While people have contested the election results, there have also been protests over the high cost of living and lack of jobs.