Luanda, Angola, 13 December 2022 (ECA) - The Government of Sao Tome and Principe, with the support of the United Nations Economic Commission for Africa (ECA) is implementing a new Value Added Tax (VAT) system to improve revenue collection.
ECA, through the Macroeconomics and Governance Division (MGD) has been supporting tax policy reforms, believing in the need to enhance domestic resource mobilization on the continent to finance its sustainable development.
As such, ECA is supporting the tax policy reform, undertaken since 2019 by the Government of Sao Tome and Principe, to adopt a generalized system of taxation of goods and services, including indirect taxation reform based on the introduction of a VAT. To enable this, ECA facilitated a peer-learning tour by Government officials to the Angolan General Tax Administration (AGT) from 5-8 December 2022. The tour was meant to ensure efficient and effective implementation and administration of Sao Tome and Principe’s new VAT system.
Angola has implemented VAT since 2019, which has become the main source of income and increased the government revenue, and thus a successful case of VAT implementation in Africa. The study tour allowed the Sao Tomean Tax and Customs Administrations from the Ministry of Planning, Finance and Blue Economy, to learn from the Angolan experience with regards to the implementation and administration of VAT system.
During the study tour, officials from both countries discussed technical issues such as credit notes VAT, VAT on natural resources, import VAT, tax exemptions rules, tax refund, legal frameworks, electronic invoicing system and special tax zones.
Mr. Hélcio do Espírito Santo, Director of Taxes in Sao Tome and Principe commended the ECA’s interest in strengthening the technical capacities of civil servants of the Tax and Customs Department of São Tomé and Principe in the field of VAT.
“We want to get valuable experience from brother countries. We want to know the process, approaches, support from the government and constraints in the implementation of VAT and try to avoid similar mistakes,” said Mr. do Espírito Santo, adding that, “We would also like to learn more about best practices and how to avoid fraud. The IT system for VAT implementation as well as the communication issues are also of interest to us”.
While Mr. José Vieira Nuno Leiria, Chairman of Board of Directors of AGT, explained that three factors were essential for the successful implementation of VAT in Angola. “First, we received support from senior officials. The Minister of Finance is now on the board of AGT and there was involvement of top officials. Second, communication. Angola communicated and publicized the VAT through the national theatres and TV networks to raise awareness among citizens. Third, the electronic system. VAT is the first electronic tax in Angola, the electronic system helps to monitor the tax base and leaves no space for tax fraud,” Mr. Leiria said.
The delegations from Sao Tome and Principe and ECA also visited the Office of Large Taxpayers and Office of Institutional Communications within AGT, as well as the customs office of the Port of Luanda to appreciate how the VAT was being traced, collected and managed.
“The training was very technical and fit to our needs, with the know-how from Angola and the support of ECA, we are ready to face the upcoming challenges,” Mr. do Espírito Santo concluded.
The next steps for the Sao Tomean Tax and Customs Tax Direction and Customs Administration will consist of finalizing the legal framework on VAT as well as the certified software to be used by economic agents to implement VAT and the VAT Administration Information System (SIT-IVA).
“We are keen to continuously provide technical support to Sao Tomé and Principe in implementing its new VAT system to further enable the country to increase its revenue mobilization to finance its sustainable development," said Ms. Nadia S. Ouedraogo, Economic Affairs Officer at the ECA.
Photo Gallery for the Angola Study Tour
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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