Luanda: Angola’s National Assembly has approved a significant amendment to the Value Added Tax (VAT) Code, reducing VAT from 14% to 5% for widely consumed food products. This decision, made at the 2nd Ordinary Plenary Meeting of the National Assembly, was passed with 106 votes in favor, none against, and 71 abstentions from the UNITA parliamentary group.
According to Angola Press News Agency, the amendment marks a reduction from the Executive’s initial proposal of 7%, aiming to alleviate the economic burdens on families and companies. The revised VAT rate will apply to essential food items, including various meats, poultry, fish, dairy products, vegetables, fruits, cereals, cooking oil, sugar, pasta, bread, and other pastries. This decision is part of the government’s efforts to normalize tax collection related to VAT and stimulate the economy.
The MPLA parliamentary group voiced its support for the amendment, emphasizing its commitment to addressing the population’s needs. Deputy Kilamba Van-Dúnem expressed that the proposal includes benefits that will allow the State to remain functional while easing the economic challenges faced by citizens.
However, UNITA deputy Florêncio Camjamba explained his party’s abstention by arguing that imposing a 5% VAT on primary foods is an ineffective measure that fails to improve access to basic goods and does not address the prevalent hunger issue. UNITA advocates for zero VAT on basic basket goods.
In response, Finance Minister Vera Daves clarified that a VAT below zero percent would be impractical, as it would likely lead to an increase in product prices rather than a reduction. The legislative initiative, requested by the President of the Republic as Head of the Executive Power, seeks to adapt the VAT Code to the current economic and social context in Angola, addressing the financial challenges faced by families and companies.
Furthermore, the province of Cabinda will have a unique VAT rate of 1%, considering the Special Regime in that region due to its geographical discontinuity.
The urgent amendment to the VAT Code was requested by the President under the terms of the Constitution and the Rules of Procedure of the National Assembly, reflecting a crucial step towards economic adjustment in Angola.
