Taxing Efficiently for Developing Inclusively (TEDI) – Support to tax reform in Mozambique

The Taxing Efficiently for Developing Inclusively (TEDI) is a tax reform programme that aims to support the Government of Mozambique’s in its ability to self-finance its economic and social development through increased, sustainable revenue collection. TEDI is jointly funded by the FCDO and the Swedish International Development Cooperation Agency (Sida), and is part of the FCDO’s broader support to the Government of Mozambique under the Tax and Economic Governance programme.

To support the realization of the Government’s objectives in revenue mobilisation, the programme is composed of a full-time advisory team, a pool of short-term technical assistance, and a £3 million Procurement Fund to support our two beneficiaries, the Mozambican Revenue Authority (MRA) and the Ministry of Economy and Finance (MEF).

TEDI provides support to our beneficiaries across four major components and workstreams to improve revenue collection:

1. Strengthening of the tax audit processes and practices by supporting the tax audit directorate in the MRA.
2.  Improving extractives taxation by supporting the Extractives Industries Taxation Unit (EITU) in the MRA.
3. Increasing tax policy skills and expertise by supporting the tax policy team in MEF.
4. Ensuring revenue reforms are inclusive and equitable through the technical assistance of a Gender and Social Inclusion advisory team that manages dedicated interventions across the workstreams.

TEDI has successfully supported a transformational shift in the way Mozambique calculates production-based taxes. Through the application of internationally benchmarked reference prices to mineral exports, for example, more than an estimated US$ 27 million in additional extractive revenues were generated within just six months. In addition, TEDI’s Tax Diagnostic has become a key instrument for fiscal policy in the country, publicly endorsed by the Minister of Finance and directly informing its national revenue strategy. Moreover, TEDI’s sustained and strategic advocacy played an important role for the establishment of a fiscal analysis department within MEF, an institutional milestone that will likely bring results well beyond the programme’s timeline.