Drop in oil prices reduces tax revenues in Angola

11 February 2015

The contribution of oil to Angola’s tax revenues is expected to fall this year to 36.5 percent, about half of the value recorded in 2014, due to the fall of in the price of oil per barrel, Angola’s President said Tuesday cited by the Angolan press.

José Eduardo dos Santos was speaking at the Presidential Palace, in Luanda, at the beginning of the Council of State, convened to discuss the difficulties that the fall in oil barrel prices is causing to public accounts.

Stressing the severe drop in tax revenue from oil activity, 70 percent in 2014 to 36.5 percent this year, Eduardo dos Santos said, “the government’s ability to carry out public spending and finance the economy has been dramatically affected.”

To adjust the public accounts to this fall as well as reviewing the expected price for the oil exports, from US$81 to US$40 per barrel, the draft amending budget for 2015 cuts total public expenditure by a third.

Diversification of the Angolan economy beyond oil, strengthening national production by imposing restrictions on imports and ongoing tax reform measures are measures identified by the government to increase non-oil tax revenues.

Formally set up in its current configuration, in January 2013, the Council of the Republic – an advisory body to the head of state – includes the vice president, Manuel Vicente, the President of the National Assembly, Fernando da Piedade Dias dos Santos, the President of the Constitutional Court, Rui Ferreira, and the Attorney General of the Republic, João Maria de Sousa.

The Council also includes the Vice President of the MPLA, the ruling party since 1975, Roberto de Almeida, and the presidents of the five parties represented in parliament. (macauhub/AO)