Angola | VAT will initially be applied to large taxpayers

Construction cranes operate among new skyscrapers being built in the business district of Luanda

The introduction of Value Added Tax (VAT) in Angola will initially focus on entities registered as large taxpayers and those with organized accounting, updated records and a computer system, said a member of the technical committee for the introduction of VAT in Angola.

Adilson Sequeira, quoted by Angolan news agency Angop, said that the committee he is working on is introducing VAT as early as January 2019, giving a two-year deadline for entrepreneurs to decide the date they want to join the system, “given that they themselves know the situation of their companies better.”

“In 2021, VAT will be widespread throughout the country,” said Sequeira, who added that the draft law was quite advanced, although still receiving contributions from professional associations and economic operators, but gave assurances that by the end of June it will be sent down to the Council of Ministers for approval.

“After the technical group finishes its work, the draft will be approved by the General Tax Administration and forwarded to the Minister of Finance for later submission to the Council of Ministers,” he said, adding that the major change is the total removal of consumer tax, “because it has a cascade effect, which is a tax on a tax.”

Tax specialist at Ernst & Young and professor at Lisbon University of Law Carlos Lobo said that VAT is already charged in 130 countries, with Angola being the only one in the Southern African Development Community that has not yet introduced it.

Lobo, who was speaking at the first of a series of meetings that Ernst & Young is planning with representatives of the business sector to analyze the impacts of the introduction of VAT, said that the tax rate, which should be announced in mid-July, is expected to be between 13 percent and 16 percent.

The professor said his estimate was based on Angola taking into account the experience of its partners in southern Africa, with which it plans to sign a free trade agreement, and where the VAT rate is within this range. MDT/Macauhub