A new law proposed by Mozambique's government plans to make raw materials used for the production of animal feed to be exempt from VAT.
Mozambique’s Association of Poultry Farmers has welcomed the move. However the chairman, Emílio Tinga, told local newspaper Notícias that the association’s poultry farmers had expected much more, specifically for VAT exemption to be extended to the entire production process, including the import of equipment.
The feed accounts for 60% of the cost of raising chickens, said Tinga, so cutting the cost of feed would be a major relief for poultry farmers. Last week the government decided to exempt animal feed from Value Added Tax (VAT). Since VAT is charged at the rate of 17 per cent, this decision should lead to a significant reduction in the price of feed.
The VAT exemption could save the poultry industry, said Rui Brandao, of the animal feed company Higest, but the final decision on altering the VAT code lies, not with the government, but with the country's parliament, the Assembly of the Republic. The government bill exempting animal feed from VAT goes before the next sitting of the Assembly, scheduled to begin on 24 October.
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