Excise Duty

Angola’s new tax paradigm

New paradigm in the consumption taxation in Angola

As from July 1, 2019, simultaneously with the VAT implementation, it is expected that excise duty will also enter into force.

The amount of excise duty will be calculated on the production cost, in case of goods produced in Angola, or on the import value, in case of imported goods.

Duty rates will vary between 2% (for most cars and oil derivatives) and 16% (for most alcoholic and sweetened drinks).

"Changing times in the paradigm of the consumption taxation in Angola are coming, which will oblige taxpayers to adapt to a new reality."

Similar to what happens in other countries, the excise duties in Angola will have as purpose:

•  To discourage the consumption of certain products or goods because they are considered superfluous and harmful to health and the environment.
•  To increase the revenues for financing of public expenditures.
•  Correct negative externalities, resulting from unwanted consumption damage.

 

The following goods will be subject to excise duties:

Harmful to health
  • Tobacco and its derivatives
  • Alcohol and alcoholic beverages
  • Beverages containing added sugar or other sweetening
Harmful to the environment
  • Vehicles, including collection vehicles
  • Petroleum products
Considered superfluous
  • Jewellery
  • Art and collection objects and antiques
  • Fireworks
  • Firearms

The implementation of excise duties is part of the ongoing reform on the Angolan tax system and is associated with the  VAT implementation.

The VAT implementation does not dismiss the maintenance of a separate level of consumption taxation which has as its purpose the increase of taxation of certain goods, intended to compensate the State for the social or environmental costs induced by their consumption.

Thus, whenever a good is subject to excise duty, the value of this tax participates for the taxable value in terms of VAT. This means that despite of both taxes having different scopes of application, when coincident, the VAT will be levied on the value of the asset plus excise duties.

It is undeniable that excise duties will be a major advance in the Angolan tax system. However, its implementation will give raise
to doubts, such as:

•  Am I a excise duty taxable person?
•  Is there any exemption for the goods that I import or produce?
•  What is the amount on which I have to calculate the payable tax?
•  What obligations will I have to fulfill and what is their deadline?
•  How should I organize my accounting system?

"The excise duty will lead to an inevitable price increase in the products on which it affects, penalizing those goods that are considered to be harmful to society."

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