Products that are part of the São Tome and Principe basic basket of goods will see their Value Added Tax (VAT) rate halved, as a way to mitigate the impact of the launch of the new tax scheduled for 1 March 2020, the country’s finance minister announced on Thursday in São Tomé.
Speaking at a conference on the introduction of VAT in the country, Osvaldo Vaz stressed that the Government had made efforts to exempt from VAT the products of agricultural, horticultural and fishing activities carried out in the country and sold in traditional markets.
The minister stated that, “the VAT rate included in the law is the possible rate, taking into account commitments to the International Monetary Fund,” and the approval of the respective code was one of the priority actions for the country to benefit from the IMF programme estimated at US$18.2 million over the next 40 months.
He said, “the government is fully aware that the adoption of VAT is a challenge, but it is important for strengthening our public finances and our economy, so that the country can earn revenue to meet development challenges.”
This announcement of measures to mitigate the impacts of VAT comes 24 hours after an IMF mission began another round of São Tomé and Príncipe macroeconomic assessment, and it has already recommended that the government, “strike a balance between resources, income and expenditure to make the economic and social development of the country possible.”(Macauhub)