Cape Verde: Joining WTO leads to 40 pct loss in tax revenues

18 December 2007

Praia, Cape Verde, 18 Dec – Forty percent of Cape Verde’s tax revenues come from its customs, a situation which will have to change when the country joins the World Trade Organization (WTO) Tuesday in Geneva, Switzerland.

“Around 40 percent of revenues are from customs. The dismantling of customs requires a significant fiscal reform, which will allow the country to replace the loss of customs revenue with other sources of charging taxes,” according to a government source.

The government, namely the Finance Minister, has repeatedly said it is necessary to restructure public administration, to respond to the new challenges of joining the WTO as well as those resulting from the country’s change of status to a medium-income country, as of January 1.

A specialized Council of Ministers is due to meet Tuesday to discuss the State Reform and Institutional Development, in order to prepare for a “macro-structuring of the central public administration.”

Cape Verde’s minister for the Economy, Growth and Competition, José Brito will be in Geneva to take part in the formal entry of Cape Verde into the WTO.

Cape Verde formally requested membership of the WTO in 1999 and, in the following year, a working group was set up to follow the process. From 2004 until now five negotiation meetings took place, with most progress being made this year. (macauhub)