Angola imposes consumption tax on oil firms
Angola, the second largest oil producer in Africa, would levy a consumption tax on oil companies. Citing government documents, Bloomberg reported this would increase costs by as much as 10%. The law would tax the services and supplies as well as equipment rentals for petroleum firms operating in the country. The southwest African country, which is also a member of the Organization of Petroleum Exporting Countries, undertook tax reforms in 2010 to increase revenues and simplify taxation.
In an email to Bloomberg, London School of Economics Researcher Emily Anderson said the move was beneficial. She said, "Oil companies have benefited from tax exemptions even as government reforms have expanded the net of taxable services. Closing loopholes in the fiscal system will bring greater tax justice and taxpayer confidence across all industries while making good economic sense."
Data from research firms GlobalData and Oilfield Support Angola revealed that companies invest USD 20 billion annually to explore and produce oil in Angola. Meanwhile, Wood Mackenzie Analyst David Thomson told Bloomberg in August that giant oil firms BP Plc, ConocoPhillips and Statoil, among others, would also drill 20 wells worth USD 3 billion in wells off Angola in 2014.