Ver Angola


Parliament considers proposal for Africell's tax incentives

Africell, Angola's fourth mobile operator, may benefit from tax incentives, namely the reduction of the final settlement rate of Industrial Tax to 3.5 percent, for a period of eight years, starting in fiscal year 2025.


To this end, the government has requested parliamentary authorization for the President to legislate on the tax and customs incentives regime, exempting the fourth mobile operator from the payment of various taxes, for a period not exceeding eight years.

This is the draft Legislative Authorization Law on Tax and Customs Exemption for the 4th TGU Project, which was this Friday considered by the specialized working committees of the National Assembly in a joint meeting.

According to the president of the Economy and Finance Committee of the National Assembly, Ruth Mendes, the Executive requested this authorization for the tax exemption, "to facilitate the entry of this company [Africell]."

"As you know, it is going to start operating and some exemptions have to be granted to facilitate its entry, its framework," Ruth Mendes said, speaking to Angolan public radio.

In the request submitted to parliament, the government states that the request was submitted taking into account that the implementation and operationalization of the project aims to increase the diversification of the supply of telecommunications services and products to citizens and companies, as well as to attribute greater competitiveness to the electronic communications market.

After the law is approved, the President will be authorized to grant tax and customs incentives, with the exemption, fixing and reduction of taxes, on the Industrial Tax rate, Capital Investment Tax, Stamp Duty, Value Added Tax, Real Estate Tax and other charges, for a period not exceeding eight years.

The company will also be able to benefit from phased application of taxes, accelerated forms of amortization and reintegration, as well as loss carry forward.

Africell will also be able to have its depreciation and reintegration rates increased by 50 percent for eight years, starting in fiscal year 2025, and its withholding industrial tax rate reduced to 6.5 percent for services acquired by the project provided by non-residents on the pre-approved list.

Other tax benefits include a reduction in the Capital Gains Tax rate to 1 percent on the distribution of profits and dividends, for a period of eight years, starting in 2025, and the analysis and granting of Value Added Tax (VAT) refunds within a maximum of 20 days, and a reduction in the Property Tax rate to 0.06 percent for the ownership of real estate intended for the office and establishment of the investment, for a period of eight years.

Regarding the customs regime, the company is granted the exemption of customs duties due on the importation of equipment destined directly and exclusively for the project, upon presentation of the Declaration of Exclusivity.

"Deferment of payment, for one year, of duties and other customs charges due for the importation of the first 1,000,000 cell phone devices, without limitation of the number of import lots", says the document, stressing that "the importation of the quantity of devices mentioned here must occur within one year, after which the normal regime for payment will follow".

For Africell, "a rapid and expeditious mechanism must also be used for customs clearance of goods destined for the project.

Regarding administrative benefits, exemptions are granted for the payment of contributions to the Communications Development Support Fund, for a period of two years, starting from the date of commencement of the 4th TGU Project, and for compliance with the minimum tariffs for the provision of publicly accessible electronic communications services, for the first 12 months, starting from the date of commencement of commercial operation.

Africell was the winner of the international public tender for the fourth universal mobile communications license in Angola, launched by the Angolan government with the aim of reforming the sector and contributing to the further development of its economy.

The group, with US capital but managed from London, has promised to invest "several hundred million dollars" in infrastructure and services and to start operating in 2021, estimating that in the next five years it will create 6,500 jobs.