Tax Reform Common Fund Mozambique, Phase III

Over the last years, the tax collection as a percentage of GDP has witnessed an impressive growth trend from 17.8% in 2009 to 27% in 2013. Switzerland contributes to the Tax Common Fund, which supports the effort of the government in improving the tax administration. Pooled funding is provided with a focus on the institutional development and on the continued implementation of reforms in the tax system, collection and administration.

The development objective of this project is to contribute to a more effective, efficient, transparent and accountable taxation system that generates additional fiscal space for poverty reduction in Mozambique through domestic revenue mobilization. Increased domestic resource mobilization leads to reduced dependency on foreign aid. The tax administration is sustainably strengthened by providing additional resources for capacity building and tax reforms, by offering a platform to interact with international experience and by providing an external monitoring of results.

The outcome of this intervention is a strengthened tax administration, with additional technical and institutional capacity to generate sustainable revenue through better administration and tax legislation, which i) leads to increased operational performance and efficiency- and ii) follows international good practices that serve as national benchmarks for integrity and provision of public services. The Common Fund contributes to institutional strengthening through the implementation of the Strategic Plan 2011-2014 of which priorities are:

1) Increasing tax collection in a sustainable way-

2) Modernizing and strengthening the tax administration-

3) Development of ICT that enables the improvements in the tax management processes

Principaux résultats attendus:  

Improved compliance with tax and customs obligations- tax education for increased number of registered taxpayers offered- effective management system for large taxpayers and mega projects created- large taxpayer units strengthened (human resources and legal equipment, integrated information system and sector specialized audit) and tax revenue from large taxpayer increased- increased capacity to implement new natural resource fiscal regime.

Human resources management system is developed- capacity of the tax administration for specific tasks like tax and customs management, accounting, expert audit on mining and petroleum industries and financial sector built-up- strengthened management lead and monitoring of human resources needs inventory and risk management- improved organizational structure and management system.

Business processes of the tax administration are modernized through application of ICT and maintenance of existing systems- e-taxation completed.

Principaux résultats antérieurs:  

As confirmed by reports of IMF missions and the Quality Assurance Group, the establishment of the tax administration is a success story. General improvements in its functions are notable and driven by the growth in revenue collection. Planning capacity and quality, working conditions for its staff and quality of services to the taxpayers has improved. The mobilization of domestic revenues has been steadily increasing, against a rapidly rising GDP, surpassing the targets of 0.5% annual increase in the revenues ratio to GDP. The institution is now better structured and more secure in its management practices, both in terms of internal management processes and in its ability to identify and deal with responsibilities arising in future. The development of the integrated IT plan has been one of the top priorities during this period and the pilot has started recently.

Phase 4 01.01.2013 - 31.12.2021   (Active)