IMF Working Papers

Is Tax Policy Costly Industrial Policy in Mozambique?

By Santos Bila, Utkarsh Kumar, Alexis Meyer-Cirkel

January 17, 2025

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Format: Chicago

Santos Bila, Utkarsh Kumar, and Alexis Meyer-Cirkel. "Is Tax Policy Costly Industrial Policy in Mozambique?", IMF Working Papers 2025, 010 (2025), accessed February 13, 2025, https://doi.org/10.5089/9798229000697.001

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Disclaimer: 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.

Summary

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.

Subject: Corporate income tax, Public financial management (PFM), Special economic zones, Tax expenditures, Tax incentives, Taxes

Keywords: Accelerated depreciation, Africa, Corporate income tax, Domestic Investment, Firm Age, Firms in Maputo, Fiscal Expenditure, Foreign Direct Investment (FDI), Global, Industrial Policy, Market Distortions, Mozambique, Mozambique's tax policy, Revenue Mobilization, Special economic zones, Sub-Saharan Africa, Tax expenditures, Tax Incentives, Tax Policy, Tax report

Publication Details

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