According to Bloomberg, telecommunication executives from the four major carriers in the Democratic Republic of the Congo, Orange SA, Airtel Africa Plc, Vodacom Group, and Africell Holding SAL, have been barred from leaving the country. This follows their opposition to the government’s decision to raise the industry’s tax from 20% to 35%. The government imposed a 15% tax increase on one of the carriers.
The new levy was deemed “irregular and thus unenforceable” by the carriers.
According to sources close to the situation, some of these executives have been barred from travelling. Orange’s local CEO and Africell’s DRC finance chief were barred from leaving the country and had their passports confiscated at Kinshasa airport earlier this month, according to a letter from the FEC to the interior minister seen by Bloomberg.
“To this day, no reason has been offered to the executives that justified these actions,” the letter said.
A Vodacom executive’s passport was also seized while she was returning from a trip. These informants requested anonymity because they were not authorised to speak about the travel bans.
Read Also: NCC dismisses plan by telecoms companies to increase call, data tariffs by 40%
DR Congo’s tax collecting spree
Despite being one of the richest countries in the world in terms of natural resource wealth. Congo is still regarded as a poor country. The country’s current financial situation has worsened, prompting the government to seek ways to repair its finances after years of mismanagement. It may have viewed tax collection as one of several revenue-raising options
According to Statista, the Democratic Republic of the Congo has the third most heavily taxed telecoms sector in the Sub-Saharan region.
In March 2022, the Democratic Republic of the Congo abandoned its widely criticised device registration tax (Registre des Appareils Mobiles / RAM) strategy. Customers were required to register their device’s International Mobile Equipment Identity (IMEI) number with the Regulatory Authority of Posts and Telecommunications (ARPTC).
The country then collected an annual fee directly from them while blocking numbers that did not register or pay the tax.
In June 2022, the Democratic Republic of the Congo ordered mobile phone companies operating in the African country to pay a levy of about $180 million per year. The invoices were sent to the operators by the regulator via a consultancy, 5C Energy, and included Orange, Vodacom Group, Airtel Africa, and Africell Holding.
The additional fee includes a charge for each voice minute, message, and megabyte of data used by customers and was rejected by telecom operators due to the impact on their business and customers.
In retaliation, the government barred the executives of these mobile carriers from leaving the country.
Read Also: NCC, 3R sign agreement to increase revenue generation in the telecoms industry
Going forward
According to Bloomberg, President Felix Tshisekedi’s government wants to expand its tax base and increase revenue as it embarks on a nationwide infrastructure development plan ahead of next year’s elections.
Orange, Vodacom, Airtel, and Africell representatives, as well as the government and telecoms regulators, have not commented on the situation
According to Bloomberg, Kimona Bononge, the FEC’s head, stated that the organisation is working with the “highest authorities of the government on this subject,” but has not commented further.
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