New customs tariffs come into force in January 1 in Angola

2 January 2014

Angola’s new customs tariff list came into force on 1 January and will increase the prices of not only imported goods but also of those produced locally, according to a recent analysis by Portuguese bank BPI.

The new customs tariff has raised tax rates on imported goods by up to 50 percent, for water and beer for example, the tax rate on which was previously 30 percent.

The rise in this tax on imported goods, BPI noted, “has the main aim of disincentivizing imports and boosting national production with a view to making the economy more self-sustainable.”

According to the note from BPI’s Department for Economic and Financial Studies, “given the weight of imported goods in calculating domestic price levels, the rise in customs prices will likely spill over to local prices and may put measures to control inflation by the Angola National Bank at risk.”

BPI’s economists say that this may happen for two reasons: First, “there is a direct effect on the final price of imported goods,” and after that, “the companies that depend on foreign goods and intermediaries react to higher production costs, raising their final prices to prevent drops in their profit margins.”

According to the analysis this means that companies that do not use imported goods in their businesses also end up raising their prices after their competitors have also raised prices. (macauhub)