The move aims to reduce living costs and support economic growth. President Daniel Chapo explained that these measures are intended to improve citizens' daily lives and help businesses by easing access to key products.

Economist Áureo Nhaca noted that for many families, particularly in rural areas, the average monthly income ranges from 10 000 to 20 000 Meticals ($156 -$312), with inflation and supply chain disruptions adding further strain. The VAT exemption is expected to make necessary goods more affordable, offering significant relief to those most affected by rising prices.

However, Nhaca raised concerns about the revenue loss from the VAT reduction, urging the government to explore alternative funding methods, such as improving tax compliance and targeting luxury goods. He also suggested that any further price reductions, such as on fuel, should be part of a broader, sustainable strategy to balance economic needs and public service funding.

While the specific implementation date is yet to be confirmed, the exemptions are expected to take effect in the coming weeks, with the government finalising the list of qualifying products.

--ChannelAfrica--