The National Assembly of São Tomé and Príncipe has given overall approval for a proposed Value Added Tax Code (VAT or IVA in Portuguese), complying with the recommendations of the International Monetary Fund (IMF) and the World Bank, the president of the São Tomé parliament announced on Tuesday.
The bill, a legislative initiative by the government of Jorge Bom Jesus, was approved during a parliamentary session that coincided with the end of another mission of the country’s macroeconomic assessment by an International Monetary Fund (IMF) team, which spent just over eight days in the archipelago.
Finance Minister Osvaldo Vaz, defending the proposal, said the VAT Code bill, which will come into force in January 2021, also aims to modernise the São Tomé tax system and will be operated exclusively on a computer platform, in line with IMF and World Bank recommendations.
The minister also said that the new VAT will replace the current consumer tax, stamp and excise duties, with a view to “improving the efficiency of the national economy and providing greater revenue collection for the São Tomé state.”
In addition to the proposal for a standard VAT rate of 10%, the government also intends, “to widen the tax base in order to gradually increase tax revenue to 16% of Gross Domestic Product.” (Macauhub)