São Tomé and Príncipe implements 15% VAT June 2023

Sales tax replaced by 15% VAT 1st June 2023

The African island state of São Tomé and Príncipe has implemented a Value Added Tax regime on 1 June 2023. The VAT rates are:

• 15% standard rate
• 7.5% on beans, bread, corn, pasta, rice
• 0% exports and other supplies

Businesses with a turnover below STD 1 million per annum are subject to a monthly 7% turnover tax instead.

The VAT regime replaced the following indirect taxes:

1. general consumption tax;
2. tax on traded services;
3. tax on alcoholic and spirits and cigarettes;
4. tax on telecommunications and hotel services; and
5. restaurant tax.

The announcement came in conjunction with work with the IMF and follows a change of government, after the Independent Democratic Action party won an absolute majority in parliamentary. Last year, the São Tomé and Príncipe’s Tax Direction and Customs Administration undertook a study of the new Angola VAT regime with the support of the Economic Commission for Africa.

São Tomé and Príncipe last attempted to introduce VAT three years ago. However, it was paused in March 2020 as COVID lockdown was introduced.

Sao Tome and Principe will join 175 countries with VAT already in place. There are 19 jurisdictions with sales taxes, including the US.

Countries with VAT or GST June 2023