Cape Verde to Abolish Vehicle Import Tax in 2027
The Cape Verdean government is set to eliminate a controversial special tax on vehicle imports starting in 2027, fulfilling a long-standing demand from the country’s business community. The announcement was made by Marcos Rodrigues, president of the Sotavento Chamber of Commerce, following a Social Concertation Council meeting in Praia where the 2027 State Budget outlines were unveiled.
A Victory for the Private Sector
The tax in question is the specific rate of the Special Consumption Tax (ICE), which has been a point of contention for years. Business leaders have long argued that the levy placed an unnecessary financial burden on both new and used vehicle imports.
“We have analyzed the crucial issue of the so-called automobile tax, which we have been discussing for years,” Rodrigues stated. “Finally, it has been removed from the total taxes to be paid. This was something employers fought hard for.”
Simplifying Import Costs
Rodrigues clarified that while the “extraordinary” tax is being scrapped, standard importation fees will remain in effect. Importers will still be responsible for customs duties and other regular tax obligations associated with bringing vehicles into the country.
“There was an extraordinary tax on vehicles, created by the previous government, which made no sense at all,” Rodrigues noted. “There are the normal taxes and customs duties which must be paid and will remain. There is simply nothing extra to add anymore.”
Background of the Tax
Introduced in 2022, the specific ICE rate imposed a flat fee of 200,000 escudos (approximately €1,815) on most vehicle imports. At the time, the government defended the measure as a way to modernize the national fleet and promote environmental sustainability. The tax specifically exempted electric vehicles and those imported by Cape Verdean emigrants returning to the country permanently.
While the government originally designed the tax to discourage the import of older, high-emission vehicles by implementing a progressive rate system, the flat-fee component drew heavy criticism from commercial sectors for driving up the cost of transportation and logistics.
Image: Pexels – Carlo Jünemann
