The role of Decree no. 70/2017 of 6 December and transfer prices in the extractive industries in Mozambique - Sasol Petroleum Temane (SPT): Case Study

Abstract

In 2000 Mozambique entered the map of countries holding significant reserves of mineral resources such as natural gas, coal, heavy sands, precious stones, among others, which resulted in an accentuated level of investment. This situation stems from the large discoveries of oil and gas in the Rovuma and Pande-Temane basin and significant coal reserves in Tete and Niassa, as well as the fact that the country has managed to attract large multinationals such as Sasol, Vale, Eni, Anadarko, Exxon Mobil and Total. With the beginning of the exploitation of these resources it was soon realized that the country had legislative gaps to deal with the problem of abusive transfer pricing which is a practice that allows multinationals to reduce their tax burden. The objective of this research is to study the role of Decree 70/2017 of 6 December in reducing the practice of abusive transfer pricing in the extractive industry sector in Mozambique. The research as to approach is qualitative and as to objective is descriptive. Interviews were used for data collection. Documentary research was used to access institutional material from SPT and ATM in addition to observation during the data collection process. It was conclusion of this research that Decree 70/2017 did not bring significant changes in tax revenue collection for the state. And recommendations were advanced for ATM to improve revenue collection.