Luanda, 28 November 2022 (ECA) - Members from the Economic Commission for Africa's (ECA) Macroeconomics and Governance Division (MGD) will accompany eight senior government officials from the São Tomé and Príncipe's Tax Direction and Customs Administration from 5-8 December on a study tour to the Angola Revenue Authority. The study tour will assist the Sao Tomean Tax and Customs Administrations from the Ministry of Planning, Finance and Blue Economy to build the required capacity within the ministry to ensure efficiency and sustainability and avoid unnecessary delays and challenges in the implementation of the new VAT system.
Nadia S. Ouedraogo, Economic Affairs Officer, ECA explains that “participants will identify the databases and digital technologies needed to build an efficient and effective VAT system to maximize their revenue mobilization efforts for financing sustainable development.” The study trip will have the advantage of providing officials of São Tomé and Príncipe with an opportunity to exchange with the tax and customs administration of Angola and, thereby, learn about the experience of the country in terms of the implementation of its tax system.
The study tour will involve visits to the Port and Tax administration center of Luanda so Sao Tomean delegates can learn how the Angola Revenue Authority uses its digital platforms such as digital information portals, single window, scanners and satellites to improve revenue collection. Further, participants of the tour are expected to become acquainted with fiscal control mechanisms, the tracking and tracing of tax systems, as well as how to combat fraud and tax evasion.
Based on legislation dating back from 1976, which imposed taxation indiscriminately on local and imported goods, São Tomé and Príncipe's consumption tax has, over the years, been broken down to obtain additional revenue, and includes the provision of services, alcoholic beverages and imported tobacco and catering. These initiatives are not always consistent with a tax environment that will accompany the country's economic development. These initiatives are oriented towards an immediate increase in revenue, which have resulted in situations of tax injustice, distortion of the rules of competition and tax evasion, among others.
To overcome these constraints and continue its efforts to modernize the tax system, Sao Tomé and Principe, between 2019-2022, undertook tax policy reform, adopting a generalized method of taxation of goods and services, including indirect taxation reform based on the introduction of a Value Added Tax system (VAT). In this regard, the Sao Tomean Ministry of Panning, Finance and Blue Economy has requested the study tour to Angola for assistance on the implementation of the country's tax reform and public finance management.
As the most recent Portuguese-speaking country to adopt and implement a VAT system, the context of implementation and current realities of Angola and São Tomé are comparable. It is for this reason that Angola has been selected for the study trip. Additionally, the challenges faced by Angola in implementing its tax system are similar to that of São Tomé, namely the establishment of the electronic invoicing system as a support for VAT, the existence of a significant informal sector and the similarity of both countries’ legal framework.
The implementation of the new VAT system in São Tomé and Príncipe is envisaged to enhance the domestic revenue mobilization efforts in the country and modernize the national tax system in line with international standards.
Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org
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