Ask the International Development Secretary, Justine Greening, to support tax justice in Mozambique by returning the excess Mozal profits.
I am disturbed to hear that an aluminium factory in Mozambique, funded by the UK government, is paying 21 times as much to foreign governments and investors as it is to the Mozambique government in tax.
I understand that the Department for International Development’s investment fund (‘the CDC Group’) gave $53 million of loans to the smelter, and has earned $88 million in interest (in addition to loan repayments). This is an obscene return from a supposed ‘development’ project.
In recent years Mozambique has been hailed as a development success story after high rates of economic growth. But if the proceeds of growth are not shared with the people of the country, it can hardly be considered ‘development’. As part of the deal financed by the UK government, the aluminium factory has been exempt from all taxes except a 1% turnover tax. Meanwhile the most recent figures show that the number of people in Mozambique who live on less than $2 a day actually increased by 3 million between 1996 and 2008.
Decisions over UK government support for the aluminium smelter were made several years ago. But this injustice needs to be addressed. Please will you:
- Hand the UK government’s excessive profit back to the people of Mozambique- Make clear the UK government would support a renegotiation of the amount of tax paid by the factory- Ensure UK international development funds are only used to support projects which pay a fair amount of tax, support genuinely equitable development, and have been openly debated, including getting the prior informed consent of affected peoples.
c/o Jubilee Debt Campaign
The Grayston Centre
28 Charles Square
+44 (0)20 7324 4722