Angolan companies accuse the General Tax Administration (AGT) of exerting intense pressure to collect overdue taxes. Entrepreneurs claim they lack the capacity to pay everything owed. For many, the only alternative is to shut down.
The AGT’s enforcement measures are too tight, say several Angolan entrepreneurs contacted by DW in the province of Cuando Cubango. They even accuse the AGT of acting in bad faith by not giving prior notice and executing debts without considering the consequences.
For young entrepreneur Francisco Xavier Ricardo, “it was necessary for the AGT to show some tolerance to avoid greater harm, because since it tightened its grip on companies, [many] have been declaring bankruptcy.”
The problem, according to the businessman, is that most companies currently don’t have the funds to pay their tax debts – and part of the blame lies with the Angolan government.
“We are not prepared for this because our companies already have very low financial capacity due to the enormous debts the State has incurred, and the State has not been punctual in its payments,” he says.
Public Debt – A Heavy Burden
Public debt has been rising for several years, especially since 2019. Last year, domestic debt increased by 21.3%, according to the Expansão newspaper. Public debt is so burdensome (58.9 trillion kwanzas) that it has caused delays in the payment of public sector salaries.
Meanwhile, Angolan entrepreneurs face severe challenges amidst high inflation and market instability.
Paulo Gaspar, president of the Association of Industrial and Commercial Entrepreneurs of Huíla, highlighted this issue during a mid-November meeting of businesspeople from southern Angola.
“We are insisting on a tax amnesty, and we have already written to [request] a tax amnesty,” he emphasized. “Within the business class, 99% of entrepreneurs in Huíla, Namibe, and Cunene are technically bankrupt due to AGT debts and unpaid fines. Many of us simply don’t have the money to pay,” he stressed.
“Isn’t the AGT Part of the State?”
A tax amnesty would mean starting with a clean slate. It would bring relief to entrepreneurs like Francisco Xavier Ricardo.
“This is suffocating. Economists know very well that taxes impoverish. If taxes impoverish, there’s no way to develop activities in a healthy manner. Therefore, at this point, the best solution would be a tax amnesty,” says Xavier Ricardo.
Entrepreneur Manuel Lopes agrees this is the right path to take – especially given the State’s debts to national companies. “Many companies owe the AGT, but isn’t the AGT part of the State?” he asks.
“It’s a government agency, tied to the Ministry of Finance. Thus, the AGT needs to reconcile with the Ministry of Finance and the government itself.”
In May, the government promised to allocate 238 billion kwanzas (over 251 million euros) to settle overdue domestic debts, especially to small and medium-sized enterprises. DW contacted the AGT, but no comment was available by the time this report was published.
DW, 25/11/2024
