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Is Tax Policy Costly Industrial Policy in Mozambique?
Author:
Santos Bila
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,
Utkarsh Kumar
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, and
Alexis Meyer-Cirkel
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Series:
IMF Working Papers
Volume/Issue:
Volume 2025: Issue 010
Language:
English
Publication Date:
17 Jan 2025
DOI:
https://doi.org/10.5089/9798229000697.001
ISBN:
9798229000697
ISSN:
1018-5941
Pages:
27
Keywords:
Tax Policy; Industrial Policy; Mozambique; Tax Incentives; Foreign Direct Investment (FDI); Revenue Mobilization; Market Distortions; Fiscal Expenditure; Domestic Investment; Mozambique's tax policy; tax report; firm Age; firms in Maputo; accelerated depreciation; Tax expenditures; Corporate income tax; Special economic zones; Global; Africa; Sub-Saharan Africa
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper analyzes the use of tax policy as industrial policy in Mozambique. Despite significant foregone tax revenue due to industrial policy in the form of tax incentives, the effectiveness of Mozambique's tax policy remains questionable due to insufficient data and unclear public policy strategy. Through an examination of macro data, tax reports, and data from World Bank Enterprise Surveys, the note underscores the need for a thorough reassessment of existing tax measures. It advocates for a more strategic, targeted and evidence-based design of tax incentives that deliver on industrial policy goals.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund