1

REPUBLIC OF MOZAMBIQUEMINISTRY OF FINANCE

MOZAMBIQUE REVENUE AUTHORITY

SIMPLIFIED TAX FOR SMALL

TAXPAYERS (ISPC)

Maputo, March 2011

SIMPLIFIED TAX FOR SMALL TAXPAYERS (ISPC)

TABLE OF CONTENTS1. Contextualization2. Definition 3. Objectives 4. Legal framework5. Taxpayers6. Applied fees7. Exemptions8. Periodicity and place of Payment 9. Modules10.Dissemination 11.Fiscal Records12.Graphic of Fiscal records13. Perspectives for 2011

2

1. Contextualization ISPC suggests the context of enlarging the revenue basis;

Acquired experience in applying VAT, IRPS and IRPC, didacted the need of creating a simplified tax in terms of fulfilling the fiscal obligations for small taxpayers.

The need to estimulate micro and small enterprises to fulfill their fiscal obligations and atract the operators of informal sector to pay taxes;

3

2. Definition It is a direct tax that is applied to individuals

ou colective entities that carry agricultural, industrial or commercial activity of small scale, including rendering of services;

It is a simple and easy tax created for small business;

4

3.Objectives

Reduce the costs of paying taxes for small taxpayers;

Reduce the costs of control of small taxpayers by the revenue administration;

Promote the changing of taxpayers that work in informal sector;

5

3.Objectives

Reduce the revenue load for the small taxepayers;

Reduce fiscal invasion;

Increase the income;

6

4. Legal framework Law nr. 5/2009, of 12 January, creates the

simplified tax for small taxpayers, designated as ISPC, published in the national gazete nr. 1, 1ª Série, 3rd Appendix;

Decree nr. 14/2009, of 14 April, aproved the regulation of simplified tax for small taxepayers, published in the National Gazzete nr. 14, 1ª série, 4th Appendix;

7

4. Legal framework

Despach of 29 of April of 2009, of His Excelency the Ministre of Finance, that aproves the modules of ISPC.

8

5. Taxpayers

Singular or legal entities:

Who carry out small activities which the volume of annual business is equal or inferior to 2,500,000.00Mt, namely:

9

10

Agricultural, industrial, commercial activities, agricultural commercialization, wholesales and retailers and rural commerce, includind stoles, quiosques, shops, as well as terciary industry and rendering of services;

They are also subject to ISPC the importers and exporters and services rendering.

5. Taxepayers

6. Taxes (Art. 8 of Law nr. 5/2009, of 12 January)

The annual fee of ISPC is of Mt 75,000.00;

Alternatively, a fee of 3% on the turnover of the year;

For the purposes of the tax of 3%, the tax base is the turnover in each calendar quarter;

Taxpayers who begin business and opt for the first time by the ISPC, the reduced tax rate of 50% in the first year of the engagement;

    

11

7. Exemption(article nr. 7 of Law 5/2009 , of 12 January)(article nr. 7 of Law 5/2009 , of 12 January)

They are exempted from payment of ISPC, taxpayers with an annual turnover of up to 36 minimum wages higher on December 31 of the previous year to which business they refer.

For the first year of implementation (2009), considered the minimum salary of Mt 2,139.50 which corresponds with the Mt 77,022.00.

   

12

7. Exemption(article nº 7 of Law 5/2009 , of 12 January)(article nº 7 of Law 5/2009 , of 12 January)

For the year 2010, the basis minimum salary became 2,758.00 Mt corresponding to Mt 99,288.00 Mt

For the year 2011, the minimum wage became 3,500.00 Mt corresponding to 126.000.00 Mt

   

13

8.Periodicity and place of payment ISPC has to be paid in the months of:

April;July;October;January.

It is paid in the Directorates of Fiscal Areas and collecting stations.

14

9. Models of ISPC(Articleo nº 2 do Decree 14/2009, of 14 April)

Declaration of initiating activities/alterations - M/01-ISPC;

Payment Guide - M/30;Statement of purchases and sales to exempt

taxpayers - M/31;Declaration of cessation of activity - M/04;A register of operations;Book VD's – ISPC;

P.S. All the documents are distributed free of charge

15

10. Dissemination of ISPC

For the publicity of the ISPC Revenue Authority have developed the following activities:

Lectures in local settlements, such as markets, fairs, etc;    

16

17

Preparation of brochures, advertisements and music;

   Conducting training for officials and State agents;

10. Dissemination of ISPC

10. Dissemination of ISPC Other taken actions:

Signing of MoU with three informal sector associations (MUKHERO, AMIM & ASSOTSI);

Preparation of an indicative scale of the amount of tax payable;

Translation of the legislation for six national languages in order to make it more accessible (Ronga and Shangana - South Sena and Ndau - Center and Macua and Nyanja - North).

18

11. Fiscal Registration

19

YEAR Total registra

ted

Imigrated to ISPC

Nr.of taxpayers That paid

ISPC

RevenueCollected in 10^3

2009 9.040 486 - 2.104,81

2010 33.130 425 21.787 23.629,97

2011 9.131 - - 9.461,03

TOTAL 51.301 911 21.787 35.195,81

11.Fiscal Registration

20

AnoTaxas aplicadas

75.000

3% Isenção Total

2009 62 8.063 375 9.040

2010 13 32.518

599 33.130

2011 0 9.131 0 9.131

Total 75 50.076

974 51.301

AnoTaxas aplicadas

75.000

3% Isenção Total

2009 62 8.063 375 9.040

2010 13 32.518

599 33.130

2011 0 9.131 0 9.131

Total 75 50.076

974 51.301

YearApplied Taxes

75.000

3% Exemption

Total

2009 62 8.063 375 9.040

2010 13 32.518

599 33.130

2011 0 9.131 0 9.131

Total 75 50.076

974 51.301

12. Fiscal Registration Graphic

21

13. Perspectives for 2011

Ongoing registration tax for small traders in places where the talks were held within the spread of ISPC,

For this year, is expected to register 50,000 new taxpayers in ISPC.,

22

13. Perspectives for 2011

Also during the year, AT will continue the dessemination, sensitization and registration of taxpayers in ISPC in locations across the country with the greatest emphasis on:

1. Improvement of subscription and records of

taxpayers;

23

24

1. Massification of Fiscal Education;

2. Disclosure of ISPC through community

radios;

3. Criation of nucleous of ISPC

implementation at district lavel.

13. Perspectives for 2011

12. Some pictures of Tax Registration

25Zimpeto Market

12. Some pictures of Tax Registration

26Fajardo Informal Market

12. Some pictures of Tax Registration

27Fajardo Informal Market

12. Some pictures of Tax Registration

28Zimpeto Market

2. Signing the memorandum of understanding

29

President of AT in the act of signining the MoU with informal sector

SAMORA IS ALIVE IN EACH OF US IN THE

FIGHT AGAINST POVERTY

30