Luanda - The new Special Contribution Law on Foreign Exchange Operations (CEOC), which came into force today, February 1st, will value local content and boost the contracting of services in the national market, the specialist from international financial consultancy Deloitte, João Erse, said.
In an interview, on Monday, on the sidelines of a workshop to clarify the new CEAOC law, promoted by Banco Caixa Geral Angola (BCGA), he stated that it will discourage the hiring of non-resident entities to provide services and products.
“CEOC will make national companies hire companies that also operate in Angolan territory, to the detriment of foreign companies, which are covered by the additional tax rate of more than 10 percent on the value of the exchange transfer”, emphasized the specialist from Deloitte Angola.
Among other advantages, the Deloitte technician pointed out that the Special Contribution Law on Foreign Exchange Operations (CEOC) allows the State to collect a greater volume of tax revenue.
Another advantage, according to João Erse, lies in the fact that CEOC is more democratic due to its coverage of natural and legal persons, as well as its extension to several areas previously unaffected by the previous law.
However, the specialist from the financial multinational warns that the implementation of the CEAC could have a harmful effect on the Angolan economy, with an increase in inflation.
From the perspective of the speaker at the clarification workshop on the entry into force of the CEOC, Angola still contracts many services abroad and inputs will become more expensive, so the service or product will become more expensive, as companies will naturally index the cost of 10% on the final consumer price.
According to the finance and audit technician, there are some sectors of activity such as mining, oil and non-oil, as a result of their specialization and complexity, they have incorporated into their daily operations, foreign service providers of specific services, which the Angolan market does not available, hence resorting to the foreign market.
Still on probable inflation, João Erse explained that entities operating in the Angolan market have the possibility of internationalizing the additional cost (of 10%) and losing profit margin or passing this cost on to customers, and, consequently, there will be an increase in prices .
Regarding this fact, the representative of the company SINFIC, Capela Ukuahamba, is in the same direction, and considers that the Special Contribution on Foreign Exchange Operations (CEOC) law will make the product and final service more expensive by an additional 10% on the national market.
According to the SINFIC representative, the previous law (2015-2020), also set at 10%, but only applied to technical services and some consultancies, but now covers travel, telecommunications services, insurance, reinsurance and rental.
The law also covers capital operations such as the acquisition of real estate, capital increases, debt instruments abroad, as well as the execution of bank guarantees.
On the other hand, Capela Ukuahamba expressed concern about the failure to issue proof of said retention, made by the bank, since, according to the directive, the bank only has the responsibility to justify it to the AGT.
“In this context, even the client, being an active entity in the process, only becomes aware of the retention of 10% for companies and 2.5% for private clients, without being given an invoice”, he complained.
For the SINFIC technician, the new CEAC law, which comes into force today, should not have retroactive effects, since many companies have already submitted their requests to banks before this date.
“The fact that this law has retroactive effect constitutes an unfair action, since the bank, due to the unavailability of currency, did not meet the customer's previously requested needs,” lamented the businessman.
The president of the Executive Board of Banco Caixa Geral Angola (BCGA), João Pires, guaranteed that his institution created all the conditions for the new Special Contribution Law on Foreign Exchange Operations (CEOC) to operate.
Rationale for the New Law
The Special Contribution on Foreign Exchange Operations (CEOC), applicable to transfers in foreign currency outside Angola, with a rate of 2.5 percent for individuals and 10 percent for legal entities, came into force on February 1, 2024.
This taxation will apply to all transfers in foreign currency abroad, carried out by natural or legal persons, domiciled or headquartered in national territory, within the scope of service provision contracts, technical assistance, consultancy and management, capital operations and unilateral transfers.
According to a statement, the tax authority reports on a meeting held with the Angolan Banks Association (ABANC), with part of the responsibility for compliance with this new standard, and recalls that the law that approved the General State Budget (OGE) for 2024, the CEOC is expected to be introduced into the Angolan legal system. OPF/AC/DOJ
