africa Angola Banking Economy Government Tax

Angola: IMF recommends use of additional tax revenues to reduce debt

The International Monetary Fund (IMF) has recommended the Angolan Government to make use of possible additional tax revenues in order to reduce the delay in payments to suppliers and reduce public debt.

The International Monetary Fund predicted an increase of 73 percent in Gross Domestic Product (GDP) this year.

IMF supported the country in decreasing its deficit for 2018 Budget, stressing that any extraordinary tax revenues should be used to do away with internal arrears and reduce public debt”.

The information is expressed in the annual analysis of the Angolan economy under the Article IV.

In view of the envisaged fall in oil prices in the medium term, the IMF managers spoke of the need for a new gradual budget consolidation to put public debt on a clear downward path, according to note on the IMF Board, that has reached Angop.

The IMF’s forecast remains almost unchanged in face of the month of April, predicting that the debt accounts for 72.9% of GDP this year and 69.9% by 2019.

IMF defends that budgetary consolidation based on the mobilisation of more domestic non-oil revenues, including through improvements in tax compliance and planned introduction of value added tax (VAT).

This also include better use of public expenditure and improvement of the quality of the public investment, simultaneously with the expansion of well-targeted social programmes “.

According to the institution, a set of policies  adopted before the 2017 August elections – fiscal expansion and fixed exchange rates – has led to further erosion in budget,” but the Government of President João Lourenço focused the attention on improving governance and restoring macroeconomic stability. ”

The IMF praised the ongoing programme of reform conducted by Angolan government aimed at addressing the challenges of post-conflict development, restore macroeconomic stability and improve the business environment “.

Source: Angop

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