Africa-Press – Angola. Business and academic leaders contacted to comment on the simplification and tax relief measures taken by the Government agree that the decisions, announced last Friday, have the potential to boost national production, with an impact on the reduction of the cost of living.
The interviewees consider that the simplification of credit access processes, combined with tax relief, will stimulate companies in the Industry and Agriculture sectors, giving them better conditions to produce at competitive prices and to generate an abundant supply, with the impact which this is expected to have on prices.
It is also expected that the combination of increased supply and the cut in the Value Added Tax (VAT) from 14 to 7.00 percent will be reflected on prices, in such a way that access to the market, consumption by families starts to generate a multiplier effect in the dynamization of the economy.
The president of the Association of Entrepreneurs in the Hotel and Tourism sector of Benguela, Jorge Gabriel, foresees a growth in sales of around 60 to 70 percent, just based on the measures announced by the Government.
The unanimity of these sources in relation to the VAT cut is greater than that of all other measures, but does not leave aside the expectations regarding the strengthening of the Kwanza, seen from a perspective in which national production promotes the substitution of imports and the reduction of foreign exchange demand.
Another feature of the decisions adopted by the Government, they say, resides in the fact that, despite their urgent nature, they do not seek to solve only short-term issues, which have outlined notions of stabilization and growth, but also a development dimension based on the projection of a broad industrialization of the country, with the local production and transformation of its natural resources.
Adriano Lopes | Economist – Leveraging companies increases purchasing power
Stimulus to the economy, with emphasis on the reduction of the Value Added Tax (VAT) from 14 to 7.00 percent, are the most correct measures for the stability of the country’s economy and the recovery of the purchasing power of the Angolan population .
They will give greater flexibility with regard to the taxation of companies, which will be forced, under this emergency measure, to lower the prices of the products they sell, especially those of the basic basket and construction materials.
Therefore, the measures that were taken are extremely important and are welcome, especially at a time when the national currency is facing a sharp depreciation.
The VAT reduction also aims to encourage the promotion of national production, which is one of the measures that, despite its emergency nature, can have positive results for both the short and long term performance of the Agriculture and Industry sectors, with the transformation of products for consumption by the population.
The reduction in taxation is a gain in terms of the import of industrial raw materials , that is, machinery to encourage the production and transformation of products.
The measures taken by the Executive only aim to encourage entrepreneurs operating in the Industry sector, with emphasis on food security and the well-being of families.
Another major gain from the measures taken by the Executive is the appreciation of the Kwanza, because, by encouraging national production, the country will stop importing on a large scale, that is, it will have greater capacity to be self-sufficient and will have greater stability of monetary policy.
Longui Bongo | Business leader – Tax cut comforts the business sector
Despite their emergency character, the decisions announced recently by the Executive are beneficial, as they will stimulate, in the short and medium term, national production, as well as improve the business environment and, consequently, give good results.
The implementation of these measures is aimed at alleviating the budget deficit, rising prices and balancing the exchange rate balance, as it will increase the purchasing power of citizens, especially those with medium and low incomes.
For this purpose, it is necessary that all the assumptions are met, with the aim of raising the internal productive capacity and guaranteeing a greater supply of products, so that the country becomes self-sufficient, reducing import levels and increasing exports of goods. finished products to capture revenues in foreign currency.
It is urgent to reduce VAT to comfort the industrial and agriculture sectors, in order to stimulate the internal economy, bearing in mind that the country has enormous natural resources, above all, arable land, water and mineral resources, to become self-sufficient. enough.
Tax exemption in some productive sectors will improve the business environment in terms of the national economy, as it will also attract foreign investors to the country, bringing currency to balance the exchange rate balance.
The diversification of the economy is the key point for the country to stop depending solely on oil revenues, and production levels are far below 2014, when around two million barrels were produced, unlike the previous years. current 1.1 million barrels.
There is also a need to decentralize the operation of the Strategic Food Reserve, located only in Luanda, bearing in mind that it must be located in the four regions of the country (North, Centre, East and South), in order to bring this service closer to the main operators economic agents and farmers from the 18 provinces, to reduce the cost of transporting products.
This measure will enable producers to sell and sell their products from the field where the infrastructures allocated to the Strategic Food Reserve of each region of the country are installed.
Jose Cangolo | University professor – Solutions adopted by the State bring positive results
The four measures recently approved by the Executive to stimulate the economy and boost its potential will contribute significantly to reducing the negative impact resulting from the devaluation of the national currency (Kwanza), compared to the two other world references (Dollar and Euro).
The impact of the devaluation of the Kwanza has always been visible to everyone. Therefore, intelligently, the Angolan Executive has taken measures that will help to reverse the situation of difficulties.
The Government understood that, in terms of the trade balance, in terms of exports and imports, the country is losing with the continuous devaluation of the Kwanza. When taking these measures, the Executive resorted to data that indicate that the national currency had been losing value at a sharp pace in less than a month, which is why it decided to find emergency solutions that will produce satisfactory results.
With much weighting, balance and in-depth analysis, the Angolan State understood that, among the reasons for the depreciation of the Kwanza, there was weak demand and the high appreciation of the reference currencies.
Due to the lack of stability of our currency, the two reference currencies always appear in supremacy in exchange terms, but the State understood the reasons that were based on this and took measures that, in my opinion, will gradually bring us positive results.
The National Bank of Angola (BNA) has already started to outline measures to avoid what could be called a “hecatomb” to the national currency, judging by what the Angolan economy is facing.
The aim is to reduce as much as possible the high dependence on imports of basic basket products, taking as a starting point the four “items” recently approved by the Executive: Increased production; Support for access to financing for the business sector; and Simplification and tax relief, including Improved business environment.
The national market places all its trust in the Economic Team that assists the Executive Power, namely, the Economic Coordination, ministries of Finance, Economy and Planning, Industry and Commerce, as well as the central bank.
Jorge Gabriel | Associative leader – Positive impact on consumer prices
The measures to stimulate the economy and boost its potential announced last Friday in Luanda by the Executive, aim to alleviate the cost of living for citizens and the reduction of VAT from 14 to 7.00 percent will have a positive impact on the prices of products that are also used in catering in the land of Acacias Rubras.
My predictions indicate that, with the reduction of VAT on food products, in catering, there will be a base boost of 60 to 70 percent.
As things were, the customer was faced with the dilemma of not taking a box of chicken at home, to go pay a steak at 12,000 kwanzas in a first class hotel or 6,000 in a medium unit.
With the situation improved, pondered and life balanced, naturally, leisure comes to the fore again, because you don’t let your family be harmed to go to leisure. This is in plain sight. The measures taken by the Executive will also favor both associations and companies.
Even in the situation we were in, the associates didn’t change the prices, because we didn’t have customers. Most of the hotels in Benguela are empty and, naturally, the announced measures should serve as a moment of reflection, with the VAT issue being welcome. We are going to meet in the near future so that we can, together with the president of the Business Alliance of Benguela, see certain issues that arise and many times, unfortunately, remain without being transmitted to the rightful people.
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