Mozambican companies will have to pay to get their VAT

The announcement that the Mozambican government will issue treasury bonds to repay the value added tax (VAT) that the state owes companies has cheered the private sector, but surely, reports ‘O País’ today, companies did not expect to have to pay for getting their own money back. The Minister of Economy and Finance, Adriano Maleiane, yesterday clarified the matter, assuring the public yesterday that refunding the VAT owed to companies by issuing treasury bonds would not increase the national debt. The reason being, said Maleiane, that the state will pay the amount of the bonds issued only to creditor enterprises. If companies that are state creditors choose to go to the bank, they will have to negotiate their reimbursement with the financial institution, and on the assumption that interest will be deducted in the amount of the treasury bond.So companies that have waited years to have their VAT refunded will get their money back in a transaction that will cost them part of it to the benefit of the commercial banks which purchase the bonds from the state. Their loss will depend on the margin that the taxpayer and the bank agree on, and it will represent the interest rate or the commission of the transaction. The state will in fact settle the debt with the commercial bank in an arrangement under which the treasury comes out of the transaction without paying any charges.