Angola drops five places on PricewaterhouseCoopers tax competitiveness list

3 December 2012

Angola fell five places in the annual tax competitiveness list drawn up by the PricewaterhouseCoopers (PwC) consultancy, to 154th place out of a total 185 countries, according to the Paying Taxes 2013 report cited by Portuguese weekly newspaper Sol.

The report, drawn up in partnership with the World Bank and the International Finance Corporation, of the World Bank group, said that the Angolan tax system, “remains difficult,” for companies although it recognised that reforms underway would make the tax system, “simpler and fairer.”

To establish each country’s ranking on the annual tax competitiveness list, the survey uses three criteria. These are: Number of tax payments a company must make in each year, the number of hours the company spends on meeting its tax obligations and, finally, the total rate of taxation.

Although for the first criteria Angola had one of the best results in Africa, for the second companies require an average 282 hours to pay their taxes, a figure that has not changed since the survey began eight years ago. In terms of the third criteria everything also remained the same, with Angola’s rate of taxation totalling 53.2 percent of profit, which is 13th highest level amongst the 51 African countries analysed.

Although Angola has reduced levels of social security payments for which employers are responsible, it is clear there is a high rate of taxation on profits, which accounts for almost half of companies’ tax burden, leading to the country having an overall rate of taxation that is higher than the world average.

According to PwC however, “the situation may change in the next few Paying Taxes reports,” due to “expected changes to industrial taxation and, more generally, an expansion of the taxpayer base.”

According to the report there are “several tax reforms underway with the aim of making the Angolan fiscal system simpler and fairer,” notably the new laws published at the end of March of this year, which introduced changes to capital gains tax, stamp duty and consumer tax. (macauhub)