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Angola to overhaul tax regime

Sep 05 2010 08:05 Reuters

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Luanda - Angola's government will launch a complete overhaul of its tax regime to improve collection and increase revenues, Minister of State Carlos Feijo said on Friday.

Feijo said management consultants McKinsey & Co had been hired to help advise on how to fix a tax regime that has not been updated since the end of a civil war in 2002.

Officials in the southern African oil-producing nation often complain they lack the means to ensure taxes are properly collected from companies operating there.

"We will work with McKinsey to revamp all our fiscal sector. Our goal is to increase our tax revenues," Feijo told a news conference on Friday.

The move takes place after a slump in oil prices in the past year prompted Angola to delay billions in payments to construction firms rebuilding the nation after the civil war. Angola turned to the International Monetary Fund for a $1.3bn loan.

Angola vies with Nigeria as Africa's biggest oil producer. It depends on oil for 90% of its export revenue. Feijo said a better tax regime would help lower the nation's external debt-to-GDP ratio, which he said stood at 38.7%.

Earlier this year, the government hired consulting firm Ernst and Young to audit government accounts as well as those of state-owned oil firm Sonangol and state-run diamond firm Endiama.

Angola is ranked in the bottom 19 of 180 countries in a Transparency International corruption survey last year.



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