Angola allows tax payments in foreign currency to cope with FX shortages

Tax payments in Angola can now be paid in foreign currency under the amended general tax law approved by lawmakers in a move to cope with a foreign currency shortage that has led to a flourishing black market.

Hit by a collapse in the price of crude oil, Africa’s second largest oil exporter has been depleting its reserves at a faster rate to fund imports and pay down government debt.

The bill amendment by parliament on Thursday was proposed by the ministry of finance.

“The tax payers can pay their taxes in foreign currency voluntarily or the Angolan tax authority must deduct the taxes in foreign currencies in cases in which more than 60 percent of the total revenue of the taxpayer is made in foreign exchange,” Finance Minister Archer Mangueira told reporters.

The amendment has been largely seen as an attempt to get more flexibility in the way taxpayers pay as well as the way government collect taxes in Angola.

While many creditors are getting paid in foreign currency, taxes have been deductible in the national local currency, the kwanza, which is now under heavy inflation pressure. Angolan inflation stood at 34.8 percent year-on-year in April.

Courtesy Reuters