Mozambique officially instituted a fixed tax rate on the sale of assets by foreign firms. An official rate of 32% will take affect starting next year. The new tax rate follows criticism on a deal in 2012 that did not benefit the country as much as it should.
Under the 2012 deal between Cove Energy and PTTEP, Cove only paid a tax rate of 12.8%. The country's parliament passed an amendment to the tax regime last year, stipulating that sales of assets held by non-resident firms would be taxed at 32% without consideration for the period they were held. But the new law was put on hold, pending a review by the president of the southeast African state.
"The constitutional issues that delayed the passing of the tax law have been overcome and the president has promulgated the law", Rosario Fernandea, head of the tax authority, told Reuters. "Come January 1, capital gains in all mega-projects, including oil and gas, will be taxed according to the new legislation".
The fixed-rate tax will affect any future gas field deals in Mozambique's attractive Rovuma basin and could spur companies with agreements in the works to push them through before the end of 2013.
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