The End of Fiscal Innocence: What Companies Should Expect from the Tax Authority in 2026

The temporary closure of several retail establishments in the city of Praia, by decision of the National Directorate of State Revenues (DNRE), marked a turning point in the relationship between the Tax Authority and the business sector. More than an isolated action, the episode signals a clear change in how the Cape Verdean State views compliance with tax obligations and anticipates an environment of greater enforcement in 2026.

A Break with the Idea of “Untouchables”

The sealing and suspension of activity of well-known shops, justified by indications of serious tax violations — namely repeated omission of invoicing, lack of certified electronic fiscal documents, and absence of reliable records — breaks with an old perception: that certain segments of the market were immune to inspection.

The fact that these measures were taken at the peak consumption period reinforces the institutional message that fiscal rules apply to everyone, regardless of company size or capital origin. The need for public explanations and political-diplomatic dialogue, including official contacts with the Chinese Embassy, suggests that the State has consciously assumed the political cost of confronting tax evasion practices in specific sectors.

What to Expect for 2026: More Control, Without Higher Rates

The State Budget for 2026 points to a significant strengthening of tax collection, estimated at about 66 billion escudos, representing a 4.9% increase compared to 2025. This increase is mainly based on VAT, corporate income tax (IRPC), and import duties, without resorting to higher tax rates. 

To support this objective, the legal framework evolves toward a tighter control environment. Among the main measures are:

• Mandatory electronic invoicing, with QR code, unique identifier, and use of certified software, subject to inspection testing;

• Revision of the VAT Code and strengthened data cross-checking between customs, the General Directorate of Contributions and Taxes (DGCI), and the Tax Authority, focusing on combating under-invoicing in imports;

• Creation of the Tax and Customs Authority of Cape Verde (ATCV), endowed with greater autonomy and technical resources, as well as expanding inspection operations to sectors considered higher risk.

In parallel, increased use of existing legal instruments, such as lifting bank secrecy and mandatory bank reporting when significant tax debts exist, is also being emphasised.

Account Freezing: An Increasingly Real Risk

The current legal framework already allows the tax administration to access bank information and act on the accounts of non-compliant taxpayers, as long as there is proven debt. Banks, in turn, are obliged to report the existence of these accounts.

This mechanism is likely to be used more frequently for two main reasons: the pressure to reduce the deficit and finance the State internally, and the tougher response to taxpayers who do not adhere to (or do not comply with) exceptional debt regularisation regimes.

In practice, freezing bank accounts becomes a concrete risk for companies with disorganised tax situations, with direct impact on their liquidity and operational capacity.

How Companies Should Prepare

Faced with this new context, there are clear and universal messages for any company, whether domestic or foreign capital:

– Basic compliance is no longer optionalIt is essential to ensure correct tax registration, updated taxpayer records, regular communication with the Tax Authority, and issuance of all transactions through certified electronic invoicing software. Reviewing import chains, declared values, tariff classification and origin documentation is also critical, given that under-invoicing has become a direct risk factor for establishment sealing.

– Active fiscal and banking risk managementCompanies should know their tax and contribution situation in detail and, if debts exist, negotiate formal payment plans before coercive measures are taken. The risk of account freezing should be considered in cash-flow planning, avoiding excessive liquidity concentrations, but always with transparency and evidence of funds origin.

– Cultural shift: from tolerance to predictabilityThe signal for 2026 is clear: less margin for non-compliance and greater predictability for those who comply. Foreign-owned companies, in particular, need to align their conduct with international standards of tax, banking, and reputational compliance, protecting not only local operations but also relationships with partners and authorities abroad.

A New Fiscal Normal

The so-called “end of innocence” does not represent only more surveillance, but a redefinition of the rules of the game. In an environment where the State demonstrates greater technical capacity and willingness to act, compliance becomes a factor of business security.

For companies that adapt, 2026 can be a year of greater stability and predictability. For those that persist in evasion practices or organisational disorder, the risks become increasingly visible — and increasingly public.

This topic was discussed in detail in the latest episode of the “Economia Descomplicada” podcast.

Listen to the full episode here:

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Economia Descomplicada - Rádio Morabeza | “O fim da inocência” – O que esperar da Autoridade Tributária para 2026