Mozambique enacted comprehensive tax legislation amendments through Laws No. 7/2025 through 12/2025, all approved and published on December 29, 2025, and effective January 1, 2026, significantly expanding the country's tax framework to capture digital economy transactions.
VAT Reforms
Law No. 10/2025 amended the VAT law to explicitly include digital goods and services within the taxable base and impose monthly reporting obligations on non-residents purchasing digital goods and services. The legislation also aligned output and input VAT treatment, revised procedures for requesting input VAT credit refunds, and repealed both the simplified and exemption VAT regimes.
Income Tax Changes
Law No. 12/2025 reformed corporate income tax by revising the permanent establishment concept and extending tax liability to income arising from the transfer of goods or provision of services through digital means. The law subjects capital gains to autonomous taxation at a 32% rate and repeals the simplified taxation regime. Law No. 11/2025 introduced parallel amendments to personal income tax with similar digital economy provisions.
Other Tax Measures
Law No. 7/2025 extended existing excise duty rates under Law No. 19/2022 until 2027. Law No. 8/2025 introduced customs duty exemptions or reductions for certain motor vehicles intended for state institutions or imported under government agreements, while establishing tariff dismantling schedules for the African Continental Free Trade Area framework from 2025 to 2033. Law No. 9/2025 amended the small taxpayers' tax code, increasing the annual turnover threshold from MT 2,500,000 to MT 4,000,000.
Context
These reforms represent Mozambique's comprehensive approach to modernizing its tax system for the digital economy, aligning with international trends toward capturing revenue from digital transactions while maintaining competitiveness through selective exemptions and regional trade integration measures.