The Mozambican government has rejected calls to pause its tax collection efforts against Galp, maintaining that the Portuguese energy company remains liable for taxes stemming from the sale of its stake in the Rovuma Basin's Area 4.
This stance comes shortly after Galp initiated international arbitration proceedings to challenge the assessment, signaling a hardening of positions in a dispute that has persisted for months.
Lusaka's refusal to defer to the arbitration process suggests the state intends to pursue domestic enforcement mechanisms concurrently with the legal battle.
For investors, this development underscores the regulatory and fiscal risks associated with Mozambique's lucrative natural gas sector, where tax authority interpretations have become a flashpoint for major operators.
The conflict centers on the taxation of Galp's exit from the Rovuma Basin project, a cornerstone of Mozambique's LNG ambitions.
The Portuguese major has argued that the tax demands are excessive and legally flawed, prompting the move to international arbitration as a means to seek a binding resolution outside the local judicial system.