Authors : Nelsia Maria De Carmen Canique Dias; Doutor Domingos Maquita Coutinho

Volume/Issue : Volume 11 - 2026, Issue 3 - March

Google Scholar : https://tinyurl.com/mr3fxsbf

Scribd : https://tinyurl.com/2tud2wrm

DOI : https://doi.org/10.38124/ijisrt/26mar1546

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Abstract : Tax revenue mobilization is crucial for economic development and the sustainability of public finances, especially in developing countries such as Mozambique. This study investigates the role of the Simplified Tax for Small Taxpayers (ISPC) in expanding the tax base at the Belenenses Market in Nampula. A mixed-methods approach, combining quantitative surveys and qualitative interviews, was employed with a sample of 248 traders from a population of approximately 650. Findings reveal extremely low compliance with the ISPC, with only 0.8% of traders registered and actively contributing, while the vast majority (99.2%) pay only municipal fees. Key factors affecting compliance include limited institutional presence, behavioral resistance, distrust in fiscal authorities, and economic constraints. Despite national-level data indicating growth in ISPC registration, empirical evidence demonstrates a substantial gap between administrative registration and actual contribution, confirming the persistence of informal economic activity. The study underscores that expanding the tax base requires not only simplified tax regimes but also effective enforcement, taxpayer education, and trust-building measures. Policy implications suggest strengthening the visibility of tax authorities, enhancing taxpayer support, providing incentives for compliance, and improving coordination with municipal authorities. Overall, the ISPC represents a positive step toward formalization, but its local-level impact remains limited.

Keywords : ISPC, Informal Sector, Tax Compliance, Tax Base Expansion, Mozambique, Belenenses Market.

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