O IVA NO SECTOR DA AGRICULTURA EM MOÇAMBIQUE (FINAL REPORT)

According to the 2007 Population Census, 70% of the population is rural. To support the development of this vital sector, the government has approved a set of fiscal incentives, including a 50% reduction in the tax rate on gasoline, a reduced tax rate of 10% on Corporate Income Tax (IRPC), and exemption from Value-Added Tax (IVA) on the internal transmission of goods and services in the agricultural, forestry, and livestock sectors. The IVA exemption in the agricultural sector is stipulated in the 2007 Value-Added Tax Code (Código do IVA). However, the exemption is often overshadowed by the lack of documentation for transactions, as most family farmers are not registered in the fiscal system and do not have a National Identification Number (NUIT) or issue invoices. This makes it difficult for farmers to deduct the IVA paid on inputs and equipment. The current system of IVA exemption only applies to the first transmission of goods and services, such as from the producer to the merchant or agro-processor. This lack of exemption in subsequent transactions, such as from the merchant to the wholesaler and from the wholesaler to the industrial processor, hinders the smooth flow of production and the value chain. The existence of many small farmers without NUIT or in the Simplified Taxation Regime, which does not allow for deductions, means that all IVA paid by these farmers on inputs and equipment is a cost that is incorporated into the final product. This study, which was validated at a seminar in Maputo attended by various economic operators, government officials, and other stakeholders, examines these problems, provides considerations, and presents proposals for solutions. The agricultural sector in Mozambique has a significant impact on the country's economy, contributing less than 25% to the GDP over the past 10 years. The sector is characterized by a large number of small farmers, with 70% of the population living in rural areas. To support the development of this sector, the government has implemented various fiscal incentives, including a 50% reduction in the tax rate on gasoline and a reduced tax rate of 10% on Corporate Income Tax (IRPC). The existence of many small farmers without NUIT or in the Simplified Taxation Regime, which does not allow for deductions, means that all IVA paid by these farmers on inputs and equipment is a cost that is incorporated into the final product. This study examines these problems, provides considerations, and presents proposals for solutions to improve the IVA system in the agricultural sector in Mozambique. The existence of many small farmers without NUIT or in the Simplified Taxation Regime, which does not allow for deductions, means that all IVA paid by these farmers on inputs and equipment is a cost that is incorporated into the final