Angola has missed out on more than one-sixth of its potential tax revenue as a result of tax incentives, 91% of which were granted to the non-oil sector, primarily for food imports, a government official announced today.
According to the Angolan Secretary of State for Finance and Treasury, Ottoniel dos Santos, tax expenditure in Angola jumped from around 184.2 billion Kwanzas (173.1 million euros) in 2018 to 2.9 trillion Kwanzas (2.7 billion euros) in 2024, representing an accumulated growth of approximately 1,517.5%, as outlined in the 2026 State General Budget Justification Report.
Ottoniel dos Santos spoke today at the opening of the regional seminar on the “Administration of Tax Incentives,” organized by the Angolan General Tax Administration in collaboration with AFRITAC South, the regional technical assistance center of the International Monetary Fund (IMF).
The Angolan official also noted that between 2018 and 2024, the weight of this tax expenditure increased from 0.64% to 2.9% of the Gross Domestic Product, and in relation to total tax revenues, it climbed from 3.1% to 17.17%.
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“In other words, today more than one-sixth of potential tax revenue is no longer collected through exemptions, rate reductions, and preferential regimes,” said Ottoniel dos Santos. The Secretary of State for Finance and Treasury highlighted that about 91% of this tax expenditure is concentrated in the non-oil sector, particularly in benefits granted to the import of food products and raw materials, as well as in support measures for the manufacturing industry.
The management of tax incentives, Ottoniel dos Santos continued, has shifted from being a secondary issue to a central piece of fiscal policy, stressing that this benefit “is only justified when it generates economic and social value superior to the revenue the State foregoes.”
“When that relationship does not exist, it stops being an incentive and turns into a privilege,” said the Angolan official, further emphasizing that “a benefit granted without evaluation, without monitoring, and without a deadline tends to turn into a permanent cost of uncertain benefit.”
Although Angola took an important step in this matter in 2022 with the approval of its Tax Benefits Code, which brought together in a single instrument benefits that were previously scattered across various legal diplomas, challenges still remain. “Situations persist where the cost of incentives is not fully known, monitoring mechanisms need to be reinforced, and evaluations do not yet allow for measuring the achieved results with the desirable depth,” the Secretary of State said.
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The Angolan official highlighted that the legal framework is under review and being strengthened, with directives set for this year to reinforce evaluation mechanisms for tax expenditure, establish prudential limits, and fully integrate tax expenditures into the fiscal framework, alongside strengthening tax administration, combating tax evasion, and modernizing customs.
“The goal is to create a framework in which tax incentives are increasingly transparent, more evaluable, and more oriented toward concrete results in investment, employment, productivity, and economic diversification,” he emphasized.
