The government is expected to close about $ 350 million in capital gains stemming from the recent sale of 25 percent of Italy’s Eni stake to Exxon Mobil for $ 2.8 billion in Rovuma area 4 to Exploitation of natural gas.
The information was made public earlier yesterday evening by the Tax Authority, as promised a few days ago, the president of that institution, Amelia Nakhare.
The approximately 350 million dollars fall into the hands of the Mozambican executive at a particularly timely time. In a way, they ease the suffocation of the Government that, a year ago, is experiencing a real financial squeeze following the suspension of support to the State Budget by the support partners. The suspension of the aid was due to the discovery of debts that had not been declared.
Henceforth, “for the purposes of settlement and payment of taxes due and for being a non-resident entity, (Eni) shall designate a natural or legal person domiciled, residing or having effective management in Mozambique for the purpose of To represent before the tax administration (TA) in order to comply with the tax obligations arising from the transaction … obligations that will only be due upon the conclusion of the transaction in the terms defined in the purchase and sale agreement entered into between the parties, “explained Anibal Mbalango, General coordinator for the Taxation of the Extractive Industry.
The entry of Exxon Mobil into the Mozambican market, which has been under consideration for several years, foresees that together with Eni, they will be at the forefront of the construction of the gas liquefaction platform to start later this year, with Eni responsible for the floating platform and Exxon Mobil for Platform.
Upon completion of the transaction, Eni and Exxon Mobil will hold 35.7% of Area 4 of the Rovuma basin. The CNPC holds 28.6% and the remaining members of the consortium, namely Empresa Nacional de Hidrocarbonetos, South Korean Kogas and Portugal’s Galp Energia, continue with a 10% stake each.
Calculation of capital gains
“Mozambican law considers that sales of shares (in the area of natural resources) are considered as gains resulting from the sale of real estate for tax purposes. The legislation also says that because it is a non-resident in Mozambique (Eni) and by virtue of Article 45 of the Personal Income Tax Code (IRPS), it refers to the corresponding categories for the purpose of IRPS. And that is where the actual situation is that the added value of these incomes is taxed at only 50%. And of these 50% is the General Tax on Corporate Income Tax (IRPC), which is 32% “.
Thus, according to the general coordinator for the taxation of the extractive industry, the approximately 350 million dollars to be taxed focused on approximately 1.1 billion dollars, considered after all the arrangements made.
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