Angola modernises tax system to attract business investment

Angola has been working for the last three years to modernise its corporate tax system to make it more effective and attractive with respect to investment and taxes on consumption and capital, among others.
António Neves is a partner of EY Portugal, a company associated to Ernst & Young Global Limited. He explains that Angola’s effort merits “applause” and paves the way to an “improved tax system” for the non-
oil sector at a time when the country is striving to diversify economic activity.
“Angola has been introducing major changes in its tax laws, especially since 2011,” Neves states in an article published last week in the Portuguese newspaper Diário Económico.
Key instruments include the new customs tariff and the new private investment law, which have facilitated access to tax incentives via investment projects contracted with the National Private Investment Agency.
The system governing urban property tax has also been reorganised, with income from property now taxed at an effective rate of 15 percent and the taxable base for industrial tax excluded, Neves said.
The consumption tax now covers various service provisions, with a new “reverse charge” introduced. A new stamp tax code has been adopted, similar to Portugal’s, and the capital gains tax includes taxation of some previously exempt activities along with income from gaming and securities.
The changes also include the sponsorship law and the law for micro, small and medium sized companies, the legal system for invoices and similar documents, and the status of major taxpayers, with specific laws on fiscal consolidation and transfer prices.
Regarding foreign exchange limits, the amount not requiring National Bank of Angola approval has substantially increased, from USD300,000 to US$1 million, or US$3 million for the oil industry.
Also approved were various transversal codes (general tax code, tax execution code, tax procedure code) and several amendments of instruments subject to modification in 2012.
Other highlights include changes to the industrial tax code and the labour income tax code, which should both be accompanied by a tax amnesty. MDT/Macauhub