As of the 1st of October 2019, Angola has introduced a 14% VAT regime, replacing the existing 10% Consumption Tax. The indirect tax was originally intended to be implemented on 1 January 2019.
The aim is to boost internal consumption, and reduce the incidence of compound tax created for businesses unable to recover Consumption Tax suffered. VAT may be reclaimed on purchases and imports made by tax payers, making it neutral for business.
Initially, for two years, VAT will only be due by large taxpayers – approximately 1,600 companies. Small businesses may register voluntarily. The regime will be extended to most taxpayers after this two-year period.
Basic foodstuffs are exempted, including rice, beans, sugar, cooking oil and school materials.
Angolan is adopting a “SLIM” approach in the implementation of VAT in Angola, i.e., Simple, Local and Modern:
- Simple, as it should establish a broad scope for the tax, with a reduced number of exemptions and with simplified tax calculations
- Local, as it should be suitable for the Angola’s national reality and socio-economic context
- Modern, as it should have a digital component and it should follow the international best practices in dealing with tax fraud and evasion