The legislative branch of the Mozambican government consists of a unicameral Assembly of the Republic, whose members are elected by popular vote to serve 5-year terms. The executive branch includes an elected cabinet and both a president, elected by popular vote to serve a 5-year term, and a prime minister, appointed by the president. Judges of the Supreme Court are also appointed by the president.
Since independence, Mozambique has been governed exclusively by FRELIMO. The ruling party formally abandoned its Marxist ideological orientation in 1989 and a new constitution in 1990 provided for multi-party elections and a free market economy. RENAMO entered the political life of the nation as a legitimate political party following the UN-negotiated peace accord in 1992. Despite its ignominious (shameful) political origins, RENAMO has been able to draw upon strong internal dissatisfactions with FRELIMO, caused by extreme poverty and unemployment, to garner a considerable amount of support from the local population. Since the establishment of the peace accords and subsequent development of RENAMO from a military force into a political party, there is little ideological difference between the 2 major parties, with both adhering to a free market and pluralistic orientation. In the most recent elections of 1999, FRELIMO won 133 of the 250 seats in the Assembly. In the same elections, RENAMO formed a coalition with several smaller parties, each of which did not respectively receive the 5 percent of the popular vote needed to win parliamentary seats by themselves, thereby acquiring the 117 remaining Assembly seats. Since 1986, the FRELIMO leader Joaquim Alberto Chissano has presided as president. Presidential elections are scheduled to be held in 2004.
The vast majority of government revenue comes from taxation. In 1999, for example, tax revenue accounted for a total of 92.4 percent of government income—14.0 percent derived from taxes on income and profits, 58.6 percent from taxes on goods and services, and 16.9 percent from taxes on international trade ( tariffs ). Businesses in Mozambique are taxed at rates of 35 percent, 40 percent, or 45 percent on annual net profits, depending upon their size. In terms of income tax , there are 4 tax brackets in Mozambique. All those that make less than Mt600,000 are exempted from taxation, persons who make between Mt600,001 and Mt2,400,000 are taxed at 10 percent, those that make between Mt2,400,001 and Mt9,600,000 are taxed at 15 percent, and all those that make more than Mt9,600,001 are taxed at 20 percent. All goods and services with a few exceptions, such as medical services and drugs, are taxed at a rate of 17 percent. Although the income taxation system is progressive, the high taxation on goods and services is retrogressive as it affects the poor much more than the rich, who can afford to pay such fees. Moreover, in addition to the general taxes on goods and services, there are also certain excise taxes levied on specific products, such as alcohol and fuel. Excise taxes are set at 20 percent, 35 percent, 50 percent, and 75 percent, depending upon the particular product.