Mozambique Oil & Gas: Costs of ENI, for calculation of Capital Gains, “are acceptable” – Tax Authority said

Eni-Exxon deal Capital Gains Tax

The Mozambique Tax Authority (ATM) told @Verdade that costs considered by ENI (Ente Nazionale Idrocarburi) SpA for the calculation of capital gains on the billionaire business conducted with Exxon Mobil “are acceptable” and clarified that ” taxes in Mozambique are self-winding because it is the taxpayer who bears the statement “.

The general coordinator for the taxation of extractive industry, Aníbal Mbalango, responded to @Verdade following the concerns of the Center for Public Integrity (CIP) , and not only in respect of reliability of costs considered for the calculation of the tax base in the sales business of 35.71% of shares held by ENI SpA East Africa in the consortium that has the concession for exploration and production of gas and oil there is in the area 4 of the Rovuma basin in the province of Cabo Delgado, and that will result in indirect transmission of 25 % participatory interest in this grant in the amount of 2.8 billion US dollars, and must generate only about $ 350 million for the treasury.

“The CIP questions the issue of costs, I just said that the breakdown of costs concerning the company, but we gave the formula. We as Tax Authority have to check this issue auditing the company, but taxes in Mozambique are self-winding because it is the taxpayer who bears the statement. We do the screening, verify the information and if we find that we are not conformed we will check, “said the senior official of the ATM.

The Mozambican tax authorities will tax the Capital Gains tax, 32%, of only 1.1 billion US dollars , less than half the value of the business.

“In the specific case, the oil industry which has daily spending over a million dollars, the costs that are presented by ENI are acceptable,” Mbalango added, in a telephone interview with @Verdade.

But the CIP considers “problematic,” “dependence of the Government in relation to information enterprises”, “since it can be intentional or unintentional omission in the statement, affecting the process of assessment of tax.”

Moreover the Center for Public Integrity, bailing up the Administrative Court’s Opinions on the 2014 General State Accounts and 2015, states that the costs presented by ENI multinational, yet Anadarko, “are not adequately monitored” pala Tax Authority and the National Oil Institute.

“We have your monitoring” assured the @Verdade Aníbal Mbalango and also revealed that the “Tax Authority created since last year a specific unit to check the mining industry and, since last year, is auditing ENI”.(source: @Verdade)