The Government of Cape Verde is preparing to move forward with a set of exceptional fiscal measures in the State Budget for 2026, at a time marked by intense political debate and the approach of legislative and presidential elections. Among the proposals is a mechanism that could allow total or partial forgiveness of tax debts, directly affecting micro and small companies.
The initiative comes in a context of parliamentary confrontation, with opposition criticism of the fiscal policy followed in the last decade and with the executive arguing that the economic results created room for extraordinary solutions to settle accumulated debts.
Political debate and electoral calendar in the background
According to the Lusa news agency, the announcement was made during the monthly debate on fiscal policies and their impact on economic growth, which is taking place this week in the Cape Verdean parliament and precedes an election year that is particularly relevant for the archipelago.
Cape Verde goes to vote in the legislative elections on May 17th and in the presidential elections on November 15th, with the Movement for Democracy trying to secure a third consecutive term, while the PAICV presents Francisco Carvalho as a candidate for prime minister.
Opposition criticism and requests for a review of the fiscal model
The news agency writes that, during the debate, deputy Julião Varela, from PAICV, classified the fiscal balance of the last ten years as a “complete failure”, pointing to a centralized and inefficient administration that absorbed a large part of the tax revenue.
The publication adds that deputy Zilda Oliveira, from UCID, defended greater transparency, evaluation of tax benefits granted and policies that ensure predictability and tax justice, considering that economic reality does not follow the official discourse.
Economic growth as the basis of government strategy
Prime Minister Ulisses Correia e Silva maintained that the Cape Verdean economy has recorded stable growth, supported by policies to encourage investment and entrepreneurship, creating conditions for more flexible management of taxation. According to the same source, between 2016 and 2025, tax revenues almost doubled, going from 32.2 billion escudos to 62.6 billion, which made it possible to reduce the budget deficit and reinforce the State’s internal financing.
This economic growth has allowed the Government to increase salaries and pensions, expand social inclusion income and implement measures, such as the exemption from user fees for health and social tariffs for water and electricity. According to the same source, the executive predicts that in 2026 the economy will continue to grow, supported by employment policies, social protection and strengthening economic resilience.
Debt forgiveness and new rules for companies
It is only in this framework that the measure that has generated more attention emerges. The State Budget for 2026 provides that, starting in February, micro and small companies will be able to negotiate debt regularization plans with the tax administration, which may include total or partial forgiveness.
These plans will be integrated into recovery and relaunch projects to be approved by ProEmpresa, including access to financing with a public guarantee, aimed at companies experiencing difficulties in meeting their tax obligations.
Broader tax reform underway
He writes that OE 2026 also consolidates the reduction in Corporate Income Tax to 20%, compared to the 25% practiced in 2016, accompanied by the rationalization of existing tax benefits.
The same source adds that this rationalization includes the introduction of a minimum rate of 5% on import duties, replacing exemption regimes, in an effort to balance economic incentives with the sustainability of public accounts.
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