Mozambique’s casino industry faces declining taxes for two consecutive years
Mozambique’s casino sector continues to struggle with meeting its tax fiscal targets, as revealed by recent government data. During the period from January to June, the Special Gaming Tax only covered 26.3% of the target for this financial year, as per budget execution figures provided by the Ministry of Finance. Within the larger context of the nation’s cumulative fiscal revenue, that measure is also small, covering a mere 0.1%.
2024 performance and future goals
Despite a few positive signs, the casino industry’s performance remains below expectations. Casino revenues for the first half of 2024 were 226 million meticais (approximately $3 million). That was a better performance than for this current year, yet short of the ambitious target for the government. For 2025, the government has set a goal of collecting 500 million meticais ($6.6 million), which represents a 29% increase from the previous year’s revenues.
Looking at the year 2024, the government had envisioned collecting 1.2 billion meticais ($6.4 million) from the entire gaming-related income. However, just 31.4% of the target was actualised, a pattern that has been recurrent since 2023. The recurring underperformance is an indication of the ongoing issues in the gaming industry and the failure to live up to fiscal targets.
Regulatory regime and required investments
The regulatory system governing Mozambique’s casinos places a high level of standards on operators. The National Directorate for Games of Chance dictates that casino concessionaires must possess a minimum share capital of $2.7 million (216 million meticais). The concessionaires must also invest a mandatory amount of at least $5.5 million (440 million meticais) within a maximum duration of five years.
Operationally, concessionaires must comply with the Special Gaming Tax, which is between 20% and 35%. The range varies according to concession length: 20% for concessions that fall between 1 and 14 years, 25% for those that fall between 15 and 19 years, 30% for those that fall between 20 and 24 years, and 35% for those that fall between 25 and 30 years. Companies must also remit a Stamp Duty that consists of 50% of the ticket price at entry. Despite these financial obligations, concessionaires in Mozambique are exempt from other taxes on operating profit and import duties on equipment and materials that are devoted solely to gaming purposes.
Private capital and sector development
In August 2024, President Filipe Nyusi reported that five gaming companies supported by private investments successfully mobilised $36 million (2.9 billion meticais). These investments aim to develop casino and slot machine concessions in cities such as Maputo, Beira, Tete, Nampula, Matola, and Pemba. The projects are considered essential components of Mozambique’s integrated tourism plan, designed to boost economic activity and attract foreign visitors.
A bumpy road ahead
The inability to hit tax revenue targets highlights the ongoing issues within the casino industry in Mozambique. Despite directing investments to new projects, the industry’s contribution to government coffers has not yet become significant. As the government outlines targets for development on the horizon, rectifying structural defects and promoting higher-paying and compliant business shall be crucial to achieving fiscal goals in the years ahead.
