Amendments, Incentives and Tax Benefits in the 2025 State Budget

The State Budget has a direct impact on the lives of all citizens. It is a fundamental document that establishes the State’s income and expenditure and is one of the pillars of democracy and the State.

Law no. 45/X/2024 of 30 December approved the State Budget, which came into force on 01 January 2025.

Amendments to the Special Legal Regime for Micro and Small Enterprises

Articles 4, 41 and 44 of Law no. 70/VIII/2014, of August 26, which approves the Special Legal Regime for Micro and Small Enterprises (hereinafter simply REMPE), as amended by Law no. 116/IX/2021, of February 2, are hereby amended.

Article 4 – Classification in Categories

Number 5 of article 4 shall be worded as follows: “Micro and small companies that exceed, by more than 30%, in any economic year, the turnover provided for in paragraph c) of number 1 of article 3 shall also be excluded from the scheme in the following financial year”.

The number 5 changes to 6 and the number 6 changes to 7.

Number 8 of article 4 shall be worded as follows: “Exclusion from the regime, as a result, does not imply the loss, for a period of 3 years, of the incentives provided for in Sections III to V of Chapter V of REMPE.”

Article 41. Tax rate reduction and exemption

In article 41, numbers 9 and 11 were revoked, with the others remaining with the same wording.

In article 44 (fees and taxes)

Article 44(1) is replaced by the following: “The acts of incorporation, of micro and small companies, of increasing the share capital, of amending the memorandum and articles of association, of closing and registering them are exempt from the payment of Stamp Duty, fees, as well as any emoluments and other legal charges.”

The amendments provide for the following reinforcements and incentives in REMPE:

• Exit from the regime for those who exceed the limit of R$10,000 by more than 30%;
• Introduction of exit incentives, i.e. maintenance, for a period of 3 years, of financial incentives, support in the creation of skills and other institutional support after exiting REMPE;
• Revocation of the incentive granted for transactions carried out through an automatic payment terminal;
• Extension of exemption from fees and charges to changes in the bylaws and the closure of Micro Small Businesses.

Amendments to the Legal Framework for Non-Customs Tax Offences

Paragraph 1 of article 107 of Legislative Decree no. 3/2014, of October 29, which approves the Legal Framework for Non-Customs Tax Offenses, as amended by Law no. 116/IX/2021, of February 2, is hereby amended to read as follows: “Failure to issue an invoice or tax-relevant documents or to issue them outside the legal deadlines, or in non-compliance with the law and regulations, in cases where the tax law so requires, is punishable by a fine of $30,000.00 to $1,000,000.00”.

Addendum to article 110 (Computer forgery and certified software) no. 4, 5 and 6.

• Marketing, assignment or provision; lack of communication of the change/update; and Use of computer programs that have not been previously certified by the Tax Administration, in either case, is punishable by a fine of $500,000.00 to $2,500,000.00.

Strengthening environmental taxation

Carbon Tax

As part of the Government’s strategy aimed at promoting a decarbonized economy by 2050 and considering the implementation of the climate action plan and the commitments made at international level, a carbon tax is created.

The fee is $550.00, intended exclusively to finance actions to mitigate and adapt to the effects of climate change.

Incidence of carbon tax:

• The fee will be levied on the issuance of commercial air passenger transport tickets departing from airports and aerodromes located in the national territory and on the docking of passenger ships at port terminals located in Cape Verde for refueling, repairs, embarking or disembarking passengers;

Exclusion of the application of the carbon tax:

The carbon tax does not apply:

• To children under 2 years of age;
• To transport services covered by public service obligations;
• To air and sea transport between islands;
• For landings or docking for reasons of technical, meteorological, force majeure or similar contingency.

Settlement, collection, payment and other procedural rules will be subject to development in a separate diploma.

Incentives for the Health Sector

Imports of goods covered by article 60 of law no. 26/VIII/2013, of January 21, republished by Law no. 86/IX/2020, of April 28, which approves the Tax Benefits Code, additionally enjoy VAT exemption during the year 2025.

Goods covered by article 60 of law no. 26/VIII/2013, of January 21, republished by Law no. 86/IX/2020, of April 28, which approves the Tax Benefits Code:

1. New and modern equipment and machinery, their accessories and maintenance parts, utensils and software, when carried out by health structures, which contribute to improving the response capacity in terms of diagnosis and therapy in the country;
2. Medicines for human use, vaccines and immunotherapeutics;
3. Specialized medical transport vehicles, notably ambulances.

Incentives for industrial production of inherent

During the year 2025, within the scope of incentives for the mechanical production of aggregates, the import of machines, equipment and their accessories and separate parts, as well as all types of material intended for the industrial production of aggregates, including extraction and transformation of mineral masses, are exempt from the payment of Import Duty (DI) and VAT.

The incentives apply to projects located on the islands of Brava, Fogo, Maio, São Nicolau and Santo Antão.

Exemptions are subject to a favorable opinion from the National Secretariat for the Environment and the National Secretariat for Commerce, Industry and Energy.

Increase in the specific tax on tobacco, alcohol, sugary products and sweets

Specific tax on tobacco

Without prejudice to the application of the Special Consumption Tax (ICE), under the terms of the legislation in force, a specific tax of 150$00 (one hundred and fifty escudos) is due for each pack of cigarettes).

The revenue collected is used to finance investment projects, sports activities and youth policies, up to the limit of its budget.

Specific tax on alcohol

Increase in the specific tax on alcoholic beverages (beer from $40 to $60/lt; wine from $60 to $90/lt; spirits from $200 to $300/lt).

The amount collected is allocated to investment projects, sports activities and investment policies, sports activities and youth policies, up to the limit of its budget.

Specific tax on sugary products

Introduction of a specific tax on sugary products of 70 esc/kg and 30 esc/lt on soft drinks.

Incentives for electric mobility

Extension of the ICMS and DI exemption for the import of electric motors and batteries for artisanal fishing vessels.

Incentives for renewable energy production

• Bonus of 50% interest on loans taken out by families, micro, small and medium-sized companies, legally constituted, with financial institutions and for the acquisition of equipment and installation services, intended for the micro-production of renewable energy.
• Exemption from ICMS on the acquisition of equipment and installation services for the micro-production of renewable energy;
• Exemption from customs duties on the import of equipment and accessories (new and modern) for the production of renewable energy based on the massive use of renewable energy sources and which contribute to the energy transition;
• Incentives for recycling waste and promoting alternative products to single-use plastic objects;
• Exemption from ICMS and DI on the import of alternative products to single-use plastics;
• Exemption from ICMS and DI on the import of equipment and materials necessary for recycling waste, and for the national production and marketing of alternative products to single-use plastics;
• Exemption from DI, VAT and ICE on the import of photovoltaic panels and inverters for the production of electricity based on solar energy, as well as batteries for the storage of this solar energy;

Strengthening social protection

• Extension of the franchise regime for the import of goods, containing foodstuffs and other articles for personal use, without a commercial nature (4 volumes/year), issued from one individual to another, member of a family group registered in the Single Social Registry (CSU), category 3;
• Reduction of the rate by 25% (from R$4 to R$3 thousand) for simplified customs clearance (small orders);
• Maintenance of the ICMS rate of 8% on the supply of electricity and water to end consumers;
• Minimum guaranteed monthly remuneration in the Public Administration of R$ 19,000 (nineteen thousand reais) and for employed employees of R$ 17,000 (seventeen thousand reais);
• Reinforcement of the budget (259 thousand escudos) for financing the social tariff for water and electricity;
• Exemption from the Customs Statistics Tax (TEA) on the import of goods offered to public utility entities, which are exclusively for humanitarian purposes;
• Creation and installation of the National School for Public Administration Training – ENCAP for the continued and systematic training of civil servants, agents and managers of the Public Administration.

Other Incentives/measures

• Introduction of a minimum rate of 5% of DI for contractual benefits (investment projects that have been submitted or whose processes have been negotiated after the entry into force of this law;
• Revocation of the 30% increase incentive on electricity and water costs;
• Exemption from the ad valorem ICE tax and a reduced ICE tax specific to the domestic production of alcoholic beverages (and 1/3 of the specific tax);
• Regularization of the situation of lack of retention and delivery of category C income;
• Mandatory requirement to have visible equipment or device, through which fiscally relevant documents are issued;
• Maintenance of incentives for employment and professional training;
• Incentives for company financing (companies that make capital contributions in cash in favor of start-ups, SMEs and companies based in peripheral areas can deduct up to 2% of the previous year’s revenue).