New customs tariffs aimed at supporting Angolan industrialisation

8 September 2008

Luanda, Angola, 8 Sept – The new Angolan customs tariff, in place since Friday 5 September, aims to encourage industrialization and the diversification of the Angolan economy, currently highly dependent on oil exports.

Set up by the Angolan Treasury, the customs tariff, called the 2007 Version, establishes tax exemption on the import of raw materials, equipment and intermediate goods for industry, as well as a reduction in tariffs on 58 categories of basic goods to reduce the price of these products for the end consumer.

“By increasing tariffs on the import of certain agricultural products, such as cornmeal, cassava, soap bar (blue), vegetable oil, whole milk, beans, rice and sugar, the cost of buying these products is increased, since national production is still considered small-scale,” said Sao de Matos recently, of the Unit for Customs modernization, quoted by newspaper, Jornal de Angola.

Speaking at a clarification session in Soyo in Zaire province for official customs agents and local investors, he emphasised the simplification of procedures brought about by the new legislation, as well as the financial benefits related to the abolition of VAT, namely on transport and individual charges.

If importers [currently] pay six kinds of tax, with the introduction of the new customs tariffs, they will pay only four. And those products which were exempt, such as equipment, raw materials and subsidiary materials, will now be subject only to a rate relating to a general customs charge,” he pointed out.

He said that the new customs tariff, “did not only lower rates, it also raised others, with the aim of improving national production.”
With these alterations, with regard to imported goods, 33 categories of different products suffered increases and for 19 categories the rates remained the same.

The Angolan Customs Code came into effect on 2 January 2007, and included modifications required for membership of the World Trade Organization (WTO), the World Customs Organization (WCO) and the Southern African Development Community (SADC).

The new changes are welcomed by the local business community, with the Angolan Industrial Association (AIA) seeing industrial sector investment as more attractive, particularly with the reduction in the tax burden on machines and equipment.

“Fewer taxes will mean greater capitalisation, which will facilitate an increase in investment leading to greater employment and the replacement of imports. Jose Severino, president of the AIA recently confirmed that this was well on the way to becoming a reality.

“The raising of taxes on some categories of goods which Angola is capable of producing itself, such as agricultural, fishing and agro-industrial products, as well as drinks, is fundamental, because the country needs to protect its national industry and replace imports, to save on foreign exchange, and the subsequent allocation of these resources to key areas for economic growth and development. We hope that the current tariff will be published as soon as possible and can be put into practice by the relevant institutions, as the national production sector is in need of better conditions to compete with imported products,” he told Angop.

Severino explained that, with the changes, disassembled equipment is subject to less tax than a machine purchased already assembled, which favours the creation of national factories, particularly for computers, domestic appliances or even vehicles, thus creating new job opportunities. (macauhub)