Mozambique: President enacts 2026 State Budget and package of tax reform laws

The Mozambican president on Monday enacted the 2026 Economic and Social Plan and State Budget (PESOE) and a package of tax reform laws, ordering their publication, according to a statement from the Presidency. “The 2026 PESOE guides the careful and strategic allocation of public resources, with a focus on productive, logistical and social infrastructure, highlighting areas such as transport, digitalisation, roads, education and health,” reads the Presidency’sstatementsent to the media. Mozambique’s parliament definitively approved the proposal for the 2026 Economic and Social Plan and State Budget on 13 December, with 163 votes from the Mozambique Liberation Front (Frelimo) and rejection by the three opposition benches, which cast 55 votes.

The Mozambican government acknowledged a “substantially more adverse” financial scenario compared to that envisaged in the initial proposal submitted to parliament in October for the 2026 budget, cutting growth forecasts to 1.6% this year and reducing expected revenues for next year. Inanother statement,also issued yesterday, the Presidency said that, in the exercise of his powers, the head of state promulgated and ordered the publication of a set of laws forming part of the package of tax reforms, including amendments to the Customs Tariff and its preliminary instructions, the Excise Duty Code, and the Simplified Tax for Small Taxpayers. The same package also includes laws amending the Value Added Tax (VAT) Code, the Personal Income Tax Code (IRPS), and the Corporate Income Tax Code (IRPC). “The promulgation of the amendments to the tax package concludes the legislative process, materialising part of the commitment undertaken by President Chapo at the time of his inauguration (…) in which he pledged, among other things, to modernise the tax regime, aligning it with the digital economy and the current financial system, with a view to achieving greater tax justice and equity, expanding the tax base, and strengthening transparency and confidence in the tax system,” the statement issued by the Presidency of Mozambique reads.