The import of photovoltaic panels will be exempt from VAT in Cabo Verde, as will water and electricity for agricultural activity, tax measures that are included in the proposed Amending Budget, under consideration in parliament.
This tax measure also applies to the import of batteries to store solar energy produced to be used in the process of producing water for agriculture, a measure that aims to mitigate the effects of three years of drought in the archipelago.
These tax-free imports can only be made “by companies duly licensed by the sector, association of the agricultural sector legally constituted and registered in the NGO platform, as well as agricultural cooperatives and other producers’ organizations” and “conditioned to the favourable opinion” of the entity responsible for water management for agriculture and the National Directorate of Environment.
The bill for the Amending Budget, presented by the government due to the health and economic crisis caused by the Covid-19 pandemic, was approved by the majority of members on Friday in parliament, in a first vote in general, followed today for discussion in the speciality.
Also read: Cabo Verde records economic growth of 5.7% in 2019
The proposed amending budget for 2020 amounts to 75,084,978,510 escudos (€679.1M), including debt, which represents an increase of 2.6% over the appropriation entered in the budget still in force. It foresees the use of public borrowing, with the government estimating ‘stock’ equivalent to 150% of Gross Domestic Product (GDP) by 2021.
The State Budget in force forecast economic growth of 4.8 to 5.8% of GDP in 2020, in line with previous years, inflation of 1.3%, a budget deficit of 1.7% and an unemployment rate of 11.4%, in addition to borrowing equivalent to 118.5% of GDP.
These forecasts have been drastically affected by the economic and health crisis, reflected in this new budget proposal for 2020: an economic recession that could range from 6.8% to 8.5%, an unemployment rate of almost 20% by the end of the year and a budget deficit that will soar to 11.4% of GDP.
Cabo Verde has had 1,698 cases of Covid-19 diagnosed since 19 March, with 19 deaths, but 732 have been considered recovered.
Since the new coronavirus was detected in China in December last year, the Covid-19 pandemic has claimed more than 565,000 lives and infected more than 12.74 million people in 196 countries and territories, according to the latest assessment by the AFP agency.
Source: Macau Business
