Will Tax Reform Drive Equitable Development in Oil-Dependent Angola?

"Angola is currently implementing a major tax reform programme, which aims to boost non-oil tax revenue as a means to diversify its economy. Broadening the tax base will play a critical role in reducing natural-resource dependence and vulnerability to international commodity price and demand volatility. Improving revenue collection and redistribution mechanisms also has the potential to strengthen the state’s institutions and relationship with society. However, the government has not used its tremendous oil wealth to develop other sectors of the economy or promote social development, leaving the country with a narrow taxable base and an exiguous taxpaying culture. The government faces several other challenges including limited fiscal decentralisation, widespread evasion and corruption, and lack of institutional and legal foundations. Political will for reform is manifest in the administration, but the question remains whether enhanced taxation will help to reconcile the disconnection between Angola’s extraordinary macroeconomic achievements and persistent underdevelopment."