Telecoms Giants From Airtel to Orange Tackle Congo Tax Standoff

Via Bloomberg, a report on the DRC’s telecommunications market:

Little over a quarter of the residents of sub-Saharan Africa’s third-most populous nation have access to the internet.

The growth potential in the Democratic Republic of Congo — home to massive deposits of copper, cobalt and other minerals — has companies from Orange to Airtel rushing in. And, the government demanding more in taxes.

Connecting one of the last untapped broadband markets could unlock billions in revenues for the companies and help bring ordinary Congolese citizens into the formal economy.

The state believes companies such as Vodafone and Orange, among others, haven’t been paying their full share — a claim that the firms have strongly denied.

The impasse has played out over several years, and in order to raise more money, officials turned to overseas consultants.

Those meetings didn’t go well.

The companies pushed back, prompting President Felix Tshisekedi’s administration to confiscate passports of the telecom managers. One executive couldn’t leave the country to receive specialist care.

Bloomberg interviewed six individuals with direct knowledge of the interactions and sector-specific taxes in question, the internal workings of Congo’s government and its dealings with the phone companies and consultancy, 5C Energy RDC.

After months of wrangling, they reached a deal with the regulator, with the firms agreeing to pay an extra $585 million to the Congo government through 2030.

The episode will help build up tax coffers in the impoverished central African nation.

It’s also curbed the companies’ push to roll out infrastructure in the Congo, sources say, leaving the average Congolese without reliable and affordable ways to connect to the internet, and falling even further behind global developments.



This entry was posted on Tuesday, April 23rd, 2024 at 10:48 pm and is filed under Democratic Republic of Congo.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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