Exports & Imports
Guinea-Bissau's main exports are agricultural products, particularly cashew nuts, which account for around 80-90% of export value. Other exports include fish, timber, and peanuts. They import a wider range of goods, including food, fuel, machinery, and manufactured products. Their main trading partners are India, Portugal, and Senegal.
Balance of Trade
Guinea-Bissau typically runs a trade deficit, meaning the value of their imports exceeds their exports. This gap is often financed by foreign aid, remittances from citizens working abroad, and loans.
Infrastructure Development
Infrastructure development in Guinea-Bissau faces challenges due to limited resources and political instability. The total road network is estimated to be around 4,500 kilometers, with most roads being unpaved and in poor condition. However, there are ongoing efforts to improve transportation links, particularly between major towns. Development in other areas like power generation and telecommunications is also underway, but significant progress is needed.
Fiscal Policy
The Guinea-Bissau government relies heavily on foreign aid to finance public spending on social programs, infrastructure development, and government salaries. Domestic revenue collection is limited due to the small size and informality of the economy.
Monetary Policy
Guinea-Bissau is a member of the West African Economic and Monetary Union (WAEMU) and uses the West African CFA franc as its currency. Therefore, the Central Bank of West African States (BCEAO) sets monetary policy for the entire region, and Guinea-Bissau has limited control over its own interest rates and money supply.
Trade Agreements
Guinea-Bissau participates in several regional trade agreements, including the Economic Community of West African States (ECOWAS). These agreements aim to facilitate trade with neighboring countries and create a larger regional market.
Environmental Regulations
Guinea-Bissau possesses significant biodiversity and natural resources. The government is developing environmental regulations to address issues like deforestation, unsustainable fishing practices, and waste management. However, enforcing these regulations can be challenging due to limited resources and competing economic interests.
Tax System in Guinea-Bissau
Capital gains tax: Information on a separate capital gains tax in Guinea-Bissau remains unavailable. Profits from investments are likely taxed as regular income.
Corporate tax rate: The standard corporate tax rate in Guinea-Bissau is still 25%.
Sales tax: Guinea-Bissau utilizes a Value Added Tax (VAT) system. The current VAT rate is still 18%, applied to most imported and domestically produced goods and services.
Property tax:A property tax system exists in Guinea-Bissau, with rates likely varying depending on location and property type.
Payroll tax: Guinea-Bissau has a payroll tax system. Employers and employees contribute to social security funds through payroll tax deductions. The exact contribution rates might require further research, but a 2022 report by the International Labour Organization (ILO) suggests these rates are undergoing review.
Tax deductions and credits: Specific details on tax deductions and credits are limited, but there are likely allowances for typical business expenses that can reduce taxable income. This can lighten the tax burden for businesses. The government might also offer special tax incentives for specific sectors or investment zones to attract investment.
Tax compliance: Tax collection efficiency in Guinea-Bissau remains an ongoing area of improvement. The government is working to strengthen tax administration to increase revenue collection, but challenges due to the informal sector and limited resources persist. However, a 2023 World Bank report.
Tax burden: Compared to some regional neighbors, the overall tax burden in Guinea-Bissau is considered moderate for both individuals and businesses. The tax-to-GDP ratio is still around 12.2%, which is lower than the average for Sub-Saharan Africa. Efforts to expand the tax net and improve compliance could see this ratio rise in the coming years.
07 Dec 2024
20 Dec 2024
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