Angola has introduced a 14% valued added tax (VAT) for the first time. It replaces a consumption tax, which had rates between 5%-30%. On the day of implementation, originally scheduled to be January 1st 2019 (then delayed to July 1st 2019), major supermarket chains in Angola, including Kero and Shoprite, closed.
Most products in a common basket of groceries such as rice, beans and cooking oil are exempt from VAT. As are medicines and medical supplies, textbooks, some bank transactions and petroleum oil derivatives. From 2021 onward all taxpayers with turnover or equivalent annual revenue in kwanzas of US$250,000 will be covered by VAT.
Companies can opt for one of two schemes: a general scheme and a transitional scheme.
VAT of 14% will have to charged on invoices from the 1,600 companies who are either registered with the Tax Office of Large Taxpayers or have voluntarily joined the general scheme. The transitional scheme has been set up for small and medium income companies (SMEs). Companies under the transitional scheme will initially charge a lower rate of VAT. It was initially supposed to be 7% but after concerns were raised by entrepreneurs the transitional rate scheme has now been set at 3%.