DRC mobile tax row escalates as company executives are prevented from leaving

DRC mobile tax row escalates as company executives are prevented from leaving

In a somewhat disturbing turn of events it has been alleged that the authorities in the Democratic Republic of Congo (DRC) have banned some telecommunications executives from leaving the country in response to their companies’ apparent unwillingness to pay a tax on mobile services introduced in June.

Bloomberg has reported that Africell, Airtel Africa, Orange and Vodacom executives may have either been prevented from travelling or had their passports taken.

It was in June this year that the DRC ordered the four mobile-phone companies operating in the country to pay a levy estimated at about $180 million a year. All four received invoices from the regulator which they rejected as irregular and therefore unenforceable.

DRC last year dropped a plan to tax mobile operators following opposition from the public as it could lead higher costs. The response was a new tax that includes an amount charged on every voice minute, message, and megabyte of data used by customers – but this time the levy cannot be passed onto users. One estimate suggests that the move increases the tax on one carrier's revenue by 15%.

The Federation des Entreprises du Congo, the country’s main business association, has expressed its concern at the measures. These are designed, presumably, to broaden the tax base of a country lacking revenue due to what is described by a number of news outlets as years of financial mismanagement.

A revenue boost is particularly important to the government as, according to Blomberg, it wants to undertake a nationwide infrastructure development plan before elections scheduled for the end of next year.

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