Mozambican researcher António
Francisco on Tuesday suggested that part of Mozambique’s Value Added Tax (VAT)
income could be channelled into social security, with a view to reducing
poverty and inequality in the country.
“We should be aware that there
are people who do not pay [Social Security] directly [through wages], but
contribute to the economy through VAT. Part of that VAT could be indirectly
returned to those over 60 years of age,” Francisco, a professor at Eduardo
Mondlane University (UEM), Mozambique’s largest and oldest, explained. Speaking
in Maputo yesterday at the conference on “Poverty, inequalities and development
models for the country”, Francisco explained that the state collects direct
revenue through salaries, and indirect revenue through VAT. The overwhelming
majority of Mozambicans have no wages to contribute to social security, but do
contribute to the economy through VAT.
“VAT is already being
collected, so why not take 2% or 3% to capitalise and give back to the elderly
when they stop working?” he asks. António Francisco also explained that
Mozambique’s social protection system was built after a model
designed to suit formal economies, which is not the case here.
“To develop the social
protection system adapted to this country, we have to create indirect
mechanisms, so as to deliver (social benefits) to people who do not pay in,
because they have no salary,” he said. The current system, he says,
“abandons” and “humiliates” the elderly. And he leaves a question: “Do
you really give 300 meticais [US$4.82] from time to time to an elderly
person who has contributed to the economy by paying VAT?”
The United Nations Sustainable
Development Goals (Agenda 2030) urge us “not leave anyone behind”, but
Mozambique leaves the majority behind, he added. “The only ones who are
protected are those who have wages. The system is discriminatory and
non-inclusive, we should devise an inclusive system adapted to the economy we
actually have,” said the UEM professor.
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