National Tax Authority Moz w FCDO 2022-2026

MAIN ACHIEVEMENTS 1) TEDI has contributed to increased revenue collection (as a result of Output 2 and Output 3 activities): The Mineral Reference Price (MRP) Bulletin published with TEDIs support since the Mineral Reference Price Diploma was published in June 2023, contributing to increased revenue collection in the extractive sector. TEDI-supported monitoring visits to various provinces also identified significant discrepancies in the use of international reference prices, revealing an estimated additional royalty payment of at least 1 billion MT (£12m), with significant recoveries already confirmed. Moreover, technical support to eliminate VAT exemptions on oil, sugar, and soap is expected to increase VAT revenue by around 3 billion MT (£36m) annually, further enhancing Mozambique's revenue collection. 2) The Bloomberg Mineral Reference Database was selected and contracting underway: A trial of the Bloomberg database was conducted in February 2024, after which the MRA confirmed their willingness to proceed with the Bloomberg database subscription. 3) Growing demand for TEDIs contribution within MEF: Over the past year, tax policy has gained prominence within MEF, creating increased demand and opportunities for TEDI's contributions. This shift is driven by the critical need for additional revenue measures in public finances, with TEDIs advocacy playing a supportive role. There is strong evidence of TEDIs analysis being used in internal tax policy discussions, supporting the Government of Mozambique in identifying measures to raise revenue collection and reduce compliance burdens. A task force for tax reform has been created and MEF has allocated a junior economist and a full-time staff member specifically tasked with tax policy analysis. 4) the program delivered GESI-sensitive (Gender, Equality and Social Inclusion) analysis to the flagship Tax Diagnostic intervention, while building GCIms cumulative understanding of GESI-sensitivity: The ISPC and IRPS tax diagnostic chapters were delivered with detailed GESI-sensitive analysis to ensure our recommendations are robust when it comes to equity and social inclusion. Various trainings were held through out the year as well as co-design of the Taxpayer Education Plan and Taxpayer Communication Strategy as well as communication products. 5) the long-standing audit sector trainings and comprehensive audit sector notes (under output 1) was concluded. The final audit sector specialised training covering the petroleum distribution sector was completed in September 2023, and the audit sector notes for seven economic sectors (banking, insurance, telecommunications, petrol distribution, construction, hospitality, and forex) delivered.

The Taxing Efficiently for Developing Inclusively (TEDI) programme is the revenue reform component of the FCDO-funded Tax and Economic Governance (TEG) Programme. TEDI is a £12 million programme, currently scheduled to operate from January 2020 to June 2025, supporting the Mozambican Revenue Authority (MRA) and the Ministry of Economy of Finance (MEF) through the provision of technical assistance and procurement of goods and services (a £3 million Procurement Fund). The programme is based on a resident full-time team, supported by part-time and short-term international and national experts. As of December 2022, the TEDI programme is jointly funded by FCDO and Sida. The overall programmes intended impact is to support the Government of Mozambique (GoM) in its ability to self-finance its economic and social development through increased, sustainable revenue collection. The programme works across the following outputs: 1) Tax Administration, providing technical assistance specifically on tax audit to the MRAs Audit Department (DiAFT); 2) Extractives, providing technical assistance to the MRAs Extractives Industry Taxation Unit (EITU); 3) Tax Policy, providing technical assistance to the MEF, specifically the National Directorate of Economic Policies and Development (DNPED); and 4) Gender, Equality, and Social Inclusion (GESI), providing support to the MRAs Communications and Image Unit (GCIm) on taxpayer communications and education as well as mainstreaming GESI considerations, particularly within tax policy.