National Tax Authority Moz w FCDO 2022-2026
Contribution ID : SE-0-SE-6-14628This website displays open data about Swedish aid, which shows when, to whom and for what purpose Swedish aid is paid out, as well as what results it has produced. This page contains information about one of the contributions financed with Swedish aid.
Taxing Efficient for Developing Inclusive (TEDI) is the revenue reform component of the FCDO-funded program for tax and financial management 2018-2024 and supports more inclusive economic growth through government revenues, public investment, debt management and financial planning in the medium to long term. Mozambique Revenue Authority (MRA, tax administrati...
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Taxing Efficient for Developing Inclusive (TEDI) is the revenue reform component of the FCDO-funded program for tax and financial management 2018-2024 and supports more inclusive economic growth through government revenues, public investment, debt management and financial planning in the medium to long term. Mozambique Revenue Authority (MRA, tax administration) and the Ministry of Finance (MEF, responsible for tax policy) receive support through technical assistance and related procurement of goods and service under a service contract with the canadian company CoWater. Under the tax administration component, TEDI supports the areas of tax auditing, taxation of extractive resources and broadening of the tax base. In tax policy, TEDI supports MEF to begin exercising its mandate for tax policy analysis and formulation.
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Result
MAIN ACHIEVEMENTS - This year, there were 5 direct revenue generating activities that TEDI contributed to, including legislative/regulatory reforms and tax administration tools related to the extractives industry. - TEDI assisted GoM (Goverment of Mozambique) in legislative revisions to mining and petroleum tax and benefit specific regulations, including approval of the Mineral Reference Price Diploma (including tax forms for mineral products specifications), which was determinant in reaching agreement under the IMF programme. - Completion of delivery of specialised sector audit trainings in 4 sectors (telecommunications, Construction, Finance, and Hospitality) leading to increased capacity in the MRAs (Mozambique Revenue Auhority) Audit Department. As a result of these trainings and increased capacity, the Audit Department has now included in their plans to audit companies related to these key economic sectors. - Scale-up activities related to audit and risk management practices have progressed with the MRAs Audit Department. The team delivered an Audit Manual and a first round of Audit Sector Notes related to Construction, Banking, and Telecommunications, which are currently under review by the MRAs Audit Department. These tools will assist auditors in conducting future audits as they contain audit techniques, common and unique industry issues, business practices, industry terminology and other information to support the performance of an audit. In addition, the foundations have been laid vis-à-vis starting compliance risk management activities, which will support the introduction of risk-based audits and greater optimisation of the audit process to focus limited resources on the highest risk to revenue collection. - TEDI provided wide-ranging support to the EITU (Extractives Industry Taxation Unit) this year from support on regulatory and legislative drafting on mineral reference pricing to transfer pricing training, operational site visits to mining and petroleum projects, as well as logistical support for extractives industries fiscal forums and conferences both in Mozambique and abroad. Together, these activities have resulted in the EITU obtaining an improved understanding of the importance of mineral reference pricing for transfer pricing and royalty payment purposes as well as how to implement reference price regulations. - An significant increase in appetite for more medium-term tax policy interventions, as evidenced by the tax policy diagnostic work and capacity building activities. Complementing TEDIs support on responsive tax policy work is the delivery of more mid-term interventions, including the holistic tax diagnostic, the fiscal benefits study (a review of tax exemptions and their benefits), and the revenue database. - There has been greater cross-institutional collaboration between MEF (Ministry of Economy and Finance) and MRA on tax policy, including the formalisation of a tax policy Community of Practice that is active and interacting on taxation issues. - Taxpayer communication and education activities were commenced. The team started an evidenced-based field assessment in two provinces (Inhambane and Sofala) to assess the impact of taxpayer education campaigns carried out by the MRA. Further provinces (Nampula and Gaza) have been selected for a second phase of field assessments. As a result, a Taxpayer Education Plan will be finalised, to roll out communication activities that seek to improve the knowledge and understanding of taxpayers rights and obligations, particularly marginalised taxpayers. - Partially met is the training delivered and completed (4 specific sectors compared to the target of 5) and No. of taxpayer comms/education material designed and/or disseminated (Communications Strategy under development and not yet finalised compared to the target "finalised").
Taxing Efficient for Developing Inclusive (TEDI) is the revenue reform component of the FCDO-funded program for tax and financial management and supports more inclusive economic growth through government revenues, public investment, debt management and financial planning in the medium to long term. Mozambique Revenue Authority (MRA, tax administration) and the Ministry of Finance (MEF, responsible for tax policy) receive support through technical assistance and related procurement of goods and service under a service contract with the canadian company CoWater. Under the tax administration component, TEDI supports the areas of tax auditing, taxation of extractive resources and broadening of the tax base. In tax policy, TEDI supports MEF to begin exercising its mandate for tax policy analysis and formulation. Through Sweden's support there is a scale up which allows for these expanded objectives: •Increase revenue collection, improve voluntary compliance, and deter fraud: To date TEDI has focused on building the capacity of auditors to conduct tax audits. However, the gains from better trained staff will be limited without a reform of the risk-based selection system. The reform will include new procedures to ensure better collection and use of information for risk analysis, implementing methods for bringing compliance risks under control, and interventions to reduce existing non-compliance behaviours. •Increase the MRA tax audit departments capacity to manage performance: This will be achieved by reforming current tax audit case management processes to ensure audits initiated are completed within timelines and adequate resources are allocated to the audit function. An efficient system will enable MRA to collect, collate, manage, analyse and most importantly generate timely performance management reports for all audit teams across the country. •Strengthen the legal framework on extractive industries taxation: This will be achieved through the review and proposal of amendments to the extractive industries legal and regulatory framework, to promote investments while ensuring revenue collection effectiveness and efficiency and control in tax and non-tax revenues for Mozambique, within a public consultation process. •Improve the performance of tax audits in the extractive sector: To date, TEDI has focused on trainings and the provision of tools to the MRA on extractive industries taxation. The Revenue Authority is now asking for TEDI to support with hands on mentoring and coaching on actual audits, reviewing processes, and removing bottlenecks through an iterative approach. TEDI response to this request can strongly improve the results in terms of increasing revenue collection form the extractive industries. •Ensure the tax policy reform process is structured and inclusive: TEDI will conduct a comprehensive review of the tax system to help government define its priorities and a plan for tax policy reforms in order to address the current short term, ad-hoc nature of tax policy formulation, which leads to inefficiencies and does not explicitly address socio-economic and GESI needs of the country. •Strengthen access to data for evidence-based policy making: TEDI aims to build a tax database to routinely collect and estimate the revenue, economic and social impacts of tax policy and administration measures to ensure the Ministry of Economy and Finance (MEF) has the ability to conduct priority reforms on the basis of sound analysis. This will importantly strengthen GoM capacity to develop its fiscal strategy and assess tax exemptions. The database will also permit MEF staff to produce regular updates for senior officials on revenue performance, define better collection targets for Mozambique Revenue Authority (MRA), improve monitoring of collection and assessment of impact of any policy changes. These improvements will strengthen the quality of GoM engagement with the IMF in discussions of policy reform options for fiscal sustainability and growth impacts. •Improve the MRAs responsiveness to GESI needs to improve voluntary compliance: Based on the TEDI study on voluntary compliance amongst marginalised groups, TEDI aims to trial with the MRA a new taxpayer communication strategy to improve voluntary compliance and help reduce risks of abuse of marginalised groups. Furthermore, TEDI will explore how to increase representation of women in the MRA, by supporting recruitment and mentoring in the organisation. It will also support the adoption of GESI disaggregated data collection as part of tax forms to improve the knowledge base. •Expanded provincial coverage: the scale-up will allow TEDI to expand the roll-out of its training activities and systems development to provinces. To note that FCDO is open to discuss and agree with Sweden about the provincial focus to propose to GoM counterparts.
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