Cape Verde's 2025 State Budget represents a significant milestone in the country's economic and social trajectory. With a clear focus on inclusion, growth and sustainability, this budget aims not only to respond to global economic challenges, but also to position Cape Verde as an example of sustainable and equitable development in the African region. <\/p>\n\n\n\n
This report by S&D Consultancy<\/a>offers a detailed analysis of the main measures and implications of the 2025 State Budget, with a special focus on information relevant to companies.<\/p>\n\n\n\n The State Budget is a crucial document that defines a country's economic and political priorities for a given fiscal year. The 2025 State Budget is particularly significant, given the global economic context and local development needs. We aim to provide a comprehensive analysis of Cape Verde's 2025 State Budget, highlighting the most relevant aspects for companies operating in the country.<\/p>\n\n\n\n The State Budget for 2025 was presented with a figure of 98 billion Cape Verdean escudos, equivalent to approximately 889 million euros, marking an increase of around 14% on the previous year's budget (Forbes Lusophone Africa<\/a>). This increase reflects the government's commitment to promoting investment, employment and social inclusion, while strengthening economic resilience against external shocks, including the impacts of climate change.<\/p>\n\n\n\n One of the most significant measures in State budget for 2025<\/a> is the reduction in the Corporate Income Tax (CIT) rate. The government proposes lowering the corporate income tax rate from 21% to 20% in 2025. For Small and Medium-sized Enterprises (SMEs), the rate applicable to the first 50 thousand euros of taxable income will be reduced from 17% to 16%. This measure aims to ease the tax burden on companies, encouraging investment and business expansion.<\/p>\n\n\n\n The 2025 State Budget introduces changes to the Tripartite Agreement on Wage Valorisation and Economic Growth 2025-2028. Companies that increase the average annual base salary per employee by at least 4.7% compared to the previous year will be able to benefit from a 200% increase in the cost of salary increases, up from the 150% previously applicable. This incentive aims to promote the valorisation of human capital and increase the competitiveness of Cape Verdean companies.<\/p>\n\n\n\n The Cape Verdean government is proposing to maintain tax incentives for business research and development. These incentives are crucial for fostering innovation and competitiveness in the global market. Companies that invest in research and development projects will be able to benefit from significant tax deductions, thus encouraging the creation of new products and services that can compete internationally.<\/p>\n\n\n\n The State Budget for 2025 provides for import exemptions for local authorities and incentives to import public passenger transport vehicles, taxis and heavy goods vehicles for tourism. These measures aim to reduce the operating costs of companies that depend on imports and improve the transport infrastructure, which is essential for economic growth and social inclusion.<\/p>\n\n\n\n A new fiscal measure introduced in the budget is the creation of a carbon tax, which aims to fund actions to mitigate and adapt to the effects of climate change. This tax will be applied from 2025 and represents the government's commitment to environmental sustainability. Companies that adopt sustainable practices will be able to benefit from tax incentives, thus promoting the transition to a green economy.<\/p>\n\n\n\n The Bank of Cape Verde (BCV) has implemented interest rate increases with the aim of controlling inflation and stabilising the economy. In November 2024, the interest rate was increased by 25 basis points, followed by a further increase of 50 basis points in January 2025. These measures are aimed at tackling factors of uncertainty, such as inflation and the reduction in foreign reserves, but they also pose a challenge for companies, which could face higher financing costs (The Nation<\/a>).<\/p>\n\n\n\n The 2025 budget prioritises investment, employment and social inclusion, with an increase of 14% compared to the 2024 budget, totalling 98 billion escudos (Forbes Lusophone Africa<\/a>). This increase in investment is aimed at strengthening resilience to economic and climate shocks, promoting shared prosperity. Companies are encouraged to participate in projects that promote social inclusion and sustainable development.<\/p>\n\n\n\n The Cape Verdean government is investing in improving air connectivity, promoting low-cost airlines and increasing domestic and international flights. This strategy aims to improve Cape Verde's internal and external connectivity, facilitating trade and tourism, vital sectors for the country's economy (Island Express<\/a>).<\/p>\n\n\n\n The 2025 State Budget presents several opportunities for companies, especially in the infrastructure, tourism and renewable energy sectors. Companies operating in these sectors can benefit from tax incentives and public funding for projects that contribute to the government's development objectives.<\/p>\n\n\n\n The budget introduces some tax changes that could impact businesses. These include:<\/p>\n\n\n\n The 2025 State Budget identifies priority sectors for investment and development, which are fundamental for economic diversification and job creation:<\/p>\n\n\n\n Despite the opportunities, companies should be aware of the challenges and risks associated with Cape Verde's economic environment:<\/p>\n\n\n\n Cape Verde's 2025 State Budget presents an ambitious plan for the country's economic and social development. Tourism and urban regeneration<\/strong>Tourism continues to be a crucial driver of the Cape Verdean economy. The budget provides for investments in urban and environmental upgrading, the valorisation of seafronts and cultural heritage, which can benefit companies linked to tourism and urban development (Government of Cape Verde<\/a>).<\/p>\n\n\n\n Air connectivity<\/strong>Improving air connectivity by promoting low-cost airlines and increasing domestic and international flights is a priority. This measure aims to improve internal and external connectivity, facilitating trade and tourism (Island Express<\/a>).<\/p>\n\n\n\n The 2025 State Budget reaffirms Cape Verde's commitment to sustainable development and social justice. The government aims to achieve balanced economic growth between the islands, transforming each one into its own economy aligned with its specific vocations. This strategy includes measures to improve infrastructure, promote social inclusion and reduce extreme poverty (Island Express<\/a>).<\/p>\n\n\n\nEconomic and social context<\/h2>\n\n\n\n
Cape Verde's economic context<\/h2>\n\n\n\n
Tax measures and incentives for companies<\/h2>\n\n\n\n
Reduction of the corporate income tax rate<\/h3>\n\n\n\n
Tax incentives for wage increases<\/h3>\n\n\n\n
Incentives for innovation and business development<\/h3>\n\n\n\n
Import exemptions and customs benefits<\/h3>\n\n\n\n
Carbon tax and sustainability<\/h3>\n\n\n\n
Monetary policy measures and their impact on companies<\/h3>\n\n\n\n
Economic development and social inclusion<\/h3>\n\n\n\n
Connectivity and infrastructure<\/h3>\n\n\n\n
Implications for companies<\/h2>\n\n\n\n
Investment opportunities<\/h3>\n\n\n\n
Tax changes<\/h3>\n\n\n\n
\n
Priority sectors<\/h3>\n\n\n\n
\n
\n
Challenges and risks<\/h3>\n\n\n\n
\n
<\/ol>\n\n\n\n
\n
Conclusion<\/h2>\n\n\n\n
Companies operating in Cape Verde should be aware of the opportunities and challenges presented by this budget. With strategic investments and a clear understanding of fiscal and economic policies, companies can position themselves to take advantage of the economic growth predicted for the coming years.<\/p>\n\n\n\n<\/ol>\n\n\n\n
Sustainable development and inclusion<\/h3>\n\n\n\n
Check out the State Budget 2025<\/h2>\n\n\n\n