Mozambican churches pay taxes on income

Churches or religious houses that have sources of income such as schools, among others, are already paying taxes to the government of Mozambique.

Augusto Tacandua, director of Mozambique’s Revenue Authority (AT), who confirmed this said it is as a result of the implementation of the tax code on value added (VAT).

Tacandua said until recently, religious denominations submitted tax exemption requests for all their activities, including those that generate some revenue.

“The decision to start taxing church-based, income-generating secondary institutions came from the fact that many of these churches are moving large sums of money from commercial activities,” he said.

He did not reveal the number of taxed institutions and the amount that that the agency has already collected, but said the instrument that regulates the collection of taxes for churches is already being implemented.

He said AT had produced an instrument that clarifies when religious congregations are exempted from paying taxes, mainly because in some situations worshipers contribute voluntarily to the operations of their respective churches.

Tacunda explained that according to the value added tax (VAT) code, churches are exempted from the transfer of assets, the provision of social assistance services and the transfer of related assets carried out by public bodies or non-profit making bodies, the purposes of which are recognized by the competent authorities.

“The matrix also indicates that non-profit-making bodies are exempt from definitive imports of goods whose shipment on national territory is objectively exempted,” he said.

The code stipulates that churches are also exempted from VAT in the acquisition and importation of goods destined for offerings to national institutions of public interest and of relevant social purposes, provided that such goods are entirely appropriate to the nature of the beneficiary institution and are used by it in activities of public interest.

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