On 31 December 2020, the Government of Cabo Verde adopted Law No 109/IX/2020, which incorporates the State Budget for 2021. The specific tax on cigarettes was increased, introducing a fee of 40 $ escudos for each package of cigarettes, both for imported products and national production. This is a tax of 0.2 escudos per cigarette. The Law entered into force on 1 January 2021.
Cabo Verde had already amended the taxation applied to tobacco products, through the adoption of Law No 44/IX/2018, in force since January 2019. The Law introduced an increase of the “Imposto sobre os Consumos Especiais (ICE)” – a special tax – from 30% to 50% , including cigarettes, cigars and waterpipe tobacco. Additionally, it was created a new specific excise tax of 20 $ escudos on each package of cigarettes, imported or nationally produced, following the recommendations of the Economic Community of West African States (ECOWAS) Council of Ministers of December 2017. To date, Cabo Verde’s tax structure is composed of an ad valorem tax, value added tax (VAT) and the new ECOWAS Tax.
The Ministry of Finance and Health in Cape Verde have been working on a promising partnership to increase taxation and simplify the tax structure, gradually eliminating the ad valorem tax in favor of a more specific taxation that is constantly increased with inflation.
As one of the Parties participating in the FCTC 2030 Project, Cabo Verde Government’s commitment to establish a consistent fiscal policy of increasing taxes on tobacco products was formalized, in line with Article 6 of the WHO FCTC and also in accordance with the Global Strategy to Accelerate Tobacco Control. Given the challenge that the price of the best-selling brand of cigarettes is well below the WHO recommendations, the real goal of the Government of Cabo Verde is to increase taxes to 75% of the single value with regular increases to overcome inflation and increase in income, in line with the national strategic plan for tobacco control 2019/2023.
For more information, please, contact: Dr Celso Monteiro, Ministry of Health and Social Security (email: firstname.lastname@example.org).
For the latest information on tobacco control in Cabo Verde, please, visit this Party webpage.
In the picture: Corne van Walbeek, Director of the WHO FCTC Knowledge Hub on Tobacco Taxation, speaking at a meeting on tobacco taxation in Praia.