Mozambique: Tax Authority employees detained for alleged involvement in illegal charges

Mozambique’s Central Office for the Fight against Corruption (GCCC) on Tuesday detained several employees of the country’s Tax Authority for illegal collection of Value Added Tax (VAT) refunds. The GCCC decided to raid the Tax Authority headquarters following a denouncement made public by the Centre for Democracy and Development (CDD), a prominent Mozambican NGO. The focus of the operations was the General Directorate of Taxes (DGI) and the Large Taxpayers Unit (UGC).

However, so far not many details about the case have been made public. Business owners have been complaining about prolonged delays in VAT refunds, illegal documentary requirements, rejections based on outdate regulations that have been repealed, and requests for illegal payments by internal teams of the Tax Authority. “The complaint also mentions the existence of a credit verification task force created by the Tax Authority itself with the stated purpose of speeding up the analysis of cases, which is now dedicated to conducting informal audits, in addition to being accused of demanding illicit financial kickbacks to unblock pending processes”, reads the CDD statement. According to the organization, the illegal practices, perpetrated by teams from the VAT Refund Division, affect even large companies such as the South African petrochemical giant Sasol, Premier Grupo Mica, and the publicly-owned electricity company, EDM.