Angola, a country situated in Southern Africa, is known for its vast natural resources, including oil, diamonds, and other minerals. In addition, it is surrounded by the South Atlantic Ocean, which plays a significant role in the country’s economy. With a population of approximately 33 million people, Angola is one of the largest countries in Africa.

Portuguese is the official language of Angola, a legacy of its colonial past. Angola was a Portuguese colony for almost five centuries until it gained its independence in 1975. Today, Portuguese remains the official language, although many Angolans also speak local languages such as Umbundu, Kimbundu, and Kikongo.

History of Angola

Angola was initially colonized by Portugal in the 16th century and gained its independence in 1975. After independence, a long period of civil war began, lasting until 2002. The country is now a presidential republic with a growing economy.

Overview of Angola’s Tax System in Angola:

Angola has a progressive tax system, which means that the tax rates increase as income increases. The tax system is composed of direct taxes, indirect taxes, and social security contributions.

Direct Taxes in Angola:

The tax system in Angola is divided into direct and indirect taxes. Direct taxes include the Personal Income Tax (PIT) and the Corporate Income Tax (CIT). PIT rates are progressive and range from 0% to 17% depending on income level. For CIT, the tax rate is a flat 30%. The PIT and CIT are the main sources of revenue for the government.

The PIT is levied on all income earned by individuals in Angola, whether resident or non-resident. Non-residents are only taxed on income earned in Angola. The CIT applies to all companies and other entities that engage in commercial activities in Angola, regardless of where they are incorporated. Companies are required to file their tax returns and pay their taxes annually.

Indirect Taxes in Angola:

The indirect taxes are the Value Added Tax (VAT), the Consumption Tax (IT), the Special Consumption Tax (IEC), and the Stamp Duty Tax. The VAT rate is 14%, and the IT rate ranges from 2% to 30%. The IEC rate varies depending on the product, and the Stamp Duty Tax rate is 1%.

Social Security Contributions in Angola:

Employers are required to contribute 8% of their employees’ salaries to the National Social Security Institute (INSS), and employees are required to contribute 3% of their salaries.

Tax Incentives:

Angola offers tax incentives to companies investing in certain sectors, such as agriculture, tourism, and industry. These incentives include exemptions from CIT, VAT, and customs duties.

Tax Administration:

The General Tax Administration (AGT) in Angola is responsible for overseeing the tax administration of the country. The AGT plays a significant role in the collection of taxes, as well as the enforcement of tax laws. Moreover, it ensures that taxpayers are provided with the necessary guidance to comply with tax regulations.

The AGT is an autonomous institution that was established in 2013. It is a merger of three institutions, namely the National Tax Directorate, Customs Services, and the General Inspectorate of Finance. The AGT reports to the Ministry of Finance and Economic Planning and operates under the supervision of the Tax Reform and Modernization Unit.

The primary functions of the AGT include the assessment and collection of taxes, the enforcement of tax laws, and the management of tax-related information. Additionally, the AGT is responsible for carrying out tax audits, investigations, and inspections to ensure compliance with tax regulations. It also provides guidance to taxpayers through various channels, including its website, call center, and taxpayer service centers.

The AGT has implemented various measures to enhance the efficiency of its tax collection process. For instance, it has introduced electronic filing and payment systems, making it easier for taxpayers to comply with tax regulations. The AGT has also increased its efforts to combat tax evasion and fraud by deploying advanced technology tools.

Tax Compliance:

Tax compliance can be challenging due to the complexity of the tax system and the lack of resources for the tax administration. It is important for taxpayers to keep accurate records and comply with all tax requirements to avoid penalties and fines.

Conclusion:

In conclusion, Angola has a progressive tax system with direct taxes, indirect taxes, and social security contributions. Furthermore, the tax rates vary depending on the income level and the type of tax. It also offers tax incentives to companies investing in certain sectors. The tax administration in is overseen by the General Tax Administration, and taxpayers must comply with all tax requirements to avoid penalties and fines.