The public consultation on the draft Tax and Contribution Statute for Social and Solidarity Economy (SSE) entities in Cape Verde represents a decisive moment in fulfilling the promise made in 2016 to recognize the SSE as a true pillar of development and not merely as a welfare supplement. From a comparative public policy perspective, this initiative is both timely and strategic, as it follows the international debate on how tax and contribution systems can structure sustainable social economies instead of merely tolerating their existence on the margins. A constructive and positive reading shows that Cape Verde is abandoning piecemeal exemption logics to build a coherent framework that combines eligibility criteria, incentives, and accountability mechanisms in a single legal architecture.<\/p>\n\n\n\n
At the heart of the proposal is the perception that applying the general tax regime indiscriminately to non-profit or limited-profit entities compromises equity and effectiveness, a concern widely discussed in Europe and Latin America regarding the social economy (OECD, 2022; ECLAC, 2023). The bill addresses the gap left by Law No. 122\/VIII\/2016 by establishing a specific statute for tax and social security treatment, anchored in principles of primacy of the general interest, proportionality, transparency, and competitive neutrality. This approach converges with international guidelines that advocate that tax measures for the social economy should be clearly linked to public interest purposes, non-distribution of profits, and reinvestment of surpluses in the mission, avoiding indiscriminate sectoral privileges (OECD, 2022). Thus, social economy entities\u2014cooperatives, associations, foundations, community organizations, and other solidarity initiatives (such as social enterprises)\u2014are treated as development partners whose tax framework is adjusted to their specific needs.\u00a0mission<\/strong>\u00a0and not just its legal label.<\/p>\n\n\n\n One of the most relevant innovations is the creation of the National Registry of Social Economy Entities, interoperable with the Tax Administration and the National Social Security Institute. This response is consistent with comparative experience, which identifies the fragmentation and opacity of information on the social economy as recurring obstacles to coherent policies and effective oversight (ECLAC, 2023; OECD, 2022). By making recognition a prerequisite for accessing tax and social security benefits, and by linking it to clear eligibility criteria\u2014legal constitution, no profit distribution, reinvestment of surpluses, and regularized tax and social security status\u2014the legislation seeks to reconcile facilitation with control. This logic of "qualified eligibility" is similar to European models of public utility status or public benefit entity status, where tax advantages depend on compliance with requirements of general interest and transparency.<\/p>\n\n\n\n From a financial sustainability perspective, the project introduces specific tax instruments that go beyond symbolic support. These include partial exemption from corporate income tax (IRPC) for income directly related to statutory purposes, a simplified 1.5% tax regime on turnover for micro-entities in the social economy, differentiated treatment of cooperative surpluses, increased spending on training and social innovation, and a reinforced regime for patronage and social investment. International experience indicates that this type of calibrated tool\u2014when accompanied by clear eligibility criteria and reporting obligations\u2014can expand the financial leeway of organizations without compromising the tax base, especially when incentives are linked to measurable social outcomes (OECD, 2022; Yoon & Lee, 2020). The decree further reinforces support through VAT exemptions for services of general interest (social inclusion, education, culture, amateur sports, care economy), customs and VAT benefits on imports directly related to the mission, property exemptions for real estate used for social purposes, and reductions in fees for incorporation acts and real estate registrations.<\/p>\n\n\n\n No less important is the contributory dimension, often undervalued in laws on the social economy that focus almost exclusively on tax benefits. The project integrates workers from social economy entities into the general mandatory social protection regime, while recognizing the specificities of micro and small entities, articulating the Statute with existing simplified regimes, such as REMPE. This dual concern aligns with the recommendations of the United Nations and the OECD, which emphasize the need for social economy policies to combine income generation with social protection, otherwise they risk reproducing forms of precariousness within "solidarity" initiatives (UN, 2023; OECD, 2022). The requirement for annual reports on activities and the application of surpluses, as well as the possibility of suspension or loss of benefits in case of non-compliance, further reinforces a culture of accountability that is essential to maintaining public and funder trust.<\/p>\n\n\n\n A truly constructive analysis, however, requires identifying the weaknesses to be improved so that the Statute becomes a transformative instrument and not just a technically sophisticated but poorly applied framework. First, the proposal deliberately assumes that it will not create new legal figures or systematize in depth the lessons of comparative law, although it presents examples from Ecuador, Mexico, Portugal, and South Korea. International literature shows that specific legal forms\u2014such as social cooperatives in Italy or certified social enterprises in South Korea\u2014can make the social mission and governance requirements more visible, provided they do not impose excessive bureaucracy (OECD, 2022; Yoon & Lee, 2020). Cape Verde's choice to first consolidate the fiscal and contributory framework based on existing institutions is understandable, but the public consultation process could explore, from now on, whether the country would benefit, in the long term, from innovative figures such as the "solidarity act" suggested in the technical document, which legally clarifies internal operations of solidarity and cooperation between social enterprises.<\/p>\n\n\n\n Secondly, it will be necessary to ensure that monitoring and reporting mechanisms do not become barriers to formalization for community-based organizations with low administrative capacity. The Statute requires activity plans, financial statements where they exist, periodic reports, and provides for requests for information and audits. Comparative studies warn that disproportionate requirements can exacerbate asymmetries within the sector, favoring larger and more professional organizations at the expense of weaker local initiatives (ECLAC, 2023; ICNL, 2019). The principle of proportionality, already enshrined in the text, needs to be implemented through simplified reporting models, differentiated thresholds, and technical support, so that micro-organizations are supported instead of penalized.<\/p>\n\n\n\n Thirdly, the principle of competitive neutrality, correctly invoked, should not be interpreted as a requirement for blind uniformity. The project itself recognizes that many social economy entities provide services that replace or complement public action and correct market failures in areas such as rural development, care provision, education, or community infrastructure. International discussion underlines that fiscal neutrality cannot ignore these positive externalities; the objective should be to avoid distorting advantages in clearly commercial markets, while recognizing the public value created by social economy organizations (Utting, 2015; OECD, 2022). In Cape Verde, the challenge will be to define more precisely the boundary between mutualist and commercial activities, especially in the case of cooperatives and social enterprises with a strong commercial component, ensuring that benefits are concentrated in operations that are truly mission-oriented and have a demonstrable community impact.<\/p>\n\n\n\n Finally, the participatory dimension of the legislative process\u2014visible in the validation workshop promoted by the Government and the European Union\u2014should not be understood as an isolated moment, but as the starting point of a shared governance model. Comparative experience shows that the most resilient frameworks for the social economy are those that institutionalize dialogue through permanent councils, co-governance mechanisms, and periodic reviews of legal regimes (ECLAC, 2023; OECD, 2022). The National Council for the Social Economy already plays a relevant technical role in the recognition and supervision processes, but the current public consultation is an opportunity to deepen the participation of social economy networks, local authorities, academia, and social movements in defining indicators, monitoring implementation, and the future revision of the Statute.<\/p>\n\n\n\n Thus, the draft Fiscal and Contribution Statute for the Social and Solidarity Economy in Cape Verde stands out as a coherent and future-oriented attempt to align fiscal and contribution policies with the reality of organizations that place social and community objectives at the center of their economic activity. By moving towards a regime of adequacy\u2014instead of privilege\u2014the country is approaching international trends that treat the social and solidarity economy as a strategic vector for inclusive and sustainable development, and not as a marginal safety net (UN, 2023; OECD, 2022). The challenge, at this consultation stage, is to leverage the contributions of different stakeholders to refine the Statute so that its promises\u2014formalization with protection, incentives with accountability, and recognition with autonomy\u2014translate into concrete gains for the diverse organizations and communities that give life to the social and solidarity economy throughout the archipelago.<\/p>\n\n\n\n References:<\/strong><\/p>\n\n\n\n Economic Commission for Latin America and the Caribbean. (2023). Legal frameworks and specialized institutional frameworks for the social and solidarity economy in Latin America<\/em>United Nations.<\/a>\u200b<\/p>\n\n\n\n International Center for Not-for-Profit Law. (2019). Comparative review of European legislation on tax benefits for social economy organizations<\/em>.<\/a>\u200b<\/p>\n\n\n\n Organization for Economic Co\u2011operation and Development. (2022). Legal frameworks for the social and solidarity economy<\/em>. OECD Publishing.<\/a>\u200b<\/p>\n\n\n\n Organization for Economic Co\u2011operation and Development. (2022). Social economy in Europe<\/em>. OECD Publishing.<\/a>\u200b<\/p>\n\n\n\n Organization for Economic Co\u2011operation and Development. (2022). Taxation in support of the social economy<\/em>.<\/a>\u200b<\/p>\n\n\n\n