Bissau, March 25, 2025 (Lusa) - The Director General of Contributions and Taxes (DGCI) of Guinea-Bissau, Ufé Vieira, told Lusa on Tuesday that the collection of Value Added Tax (VAT) for the first time in the country since January "has exceeded expectations".
"At this stage, the implementation is going positively, from the point of view of [tax] collection it is proving that it has a greater capacity compared to the IGV," (General Sales Tax), which the country had practised since the mid-1990s.
Ufé Vieira said that in two months, the new tax has collected more than six billion CFA francs (more than €9 million) and announced that the DGCI is preparing a report to show the tax revenue collected since the introduction of VAT in January 2025 compared to the tax collected in the same periods of the previous year.
The director-general praises the way taxpayers are embracing VAT, the implementation of which he considers to be "the biggest tax reform" in Guinea-Bissau in recent times.
"Taxpayers are pleased to find a fairer and more dynamic system for taxing their activities," said the Director General of Contributions and Taxes of Guinea-Bissau.
Ufé Vieira emphasised that the implementation of VAT relies on a digital declaration model and an "easy to master" code, which, he said, makes declarations simple.
"The process has exceeded expectations. So far we haven't had any complaints from large taxpayers or small and medium-sized companies," noted the director-general of Guinea-Bissau's Taxes and Contributions.
The only difficulty has been applying a flat rate (tax applied on a value) when importing for non-declarant taxpayers, "the informal ones who used the IGV to bring in their products without a regular declaration," noted Ufé Vieira.
Vieira said the DGCI first applied a flat rate of 30% on top of the customs value of their goods, but after the retailers' association protested, the rate was reduced to 5%.
"The measure is designed to discourage informality," added the Director General of Taxes, who emphasised that it was not the Guinean government's intention to overburden taxpayers or increase the price of products by implementing VAT.
On the other hand, Ufé Vieira said that the suspension of the application of the flat rate at the amount initially proposed meant that the DGCI lost "some revenue", but that they are still "discovering some sectors to be exploited" with the new tax.
"VAT should be present in all of the country's economic activity, unlike the IGV, which was only levied on imports, commercialisation and services," noted Vieira, pointing, for example, to taxpayers in the interior of Guinea-Bissau.
The director of Taxes is confident that VAT will help the institution reach the tax revenue target set in the General State Budget for the current year, which is 82.2 billion CFA francs.
In January and February of this year alone, the DGCI achieved a "surplus", with revenues totalling 150% and with a tendency to increase in the coming months, said Ufé Vieira.
MB/ADB // ADB.
Lusa
