DR Congo Demands Telecoms Giants Pay More Tax

In December 2021, the heads of four major telecom operators in Africa were summoned to the Palais de la Nation in Kinshasa, the capital of the Democratic Republic of Congo (DRC). Officials from President Felix Tshisekedi’s administration informed them of impending strict new tax regulations that would significantly increase their companies’ tax liabilities.

The executives, representing Vodafone, Orange, Airtel, and Africell, were grilled by government officials during the meeting. The DRC, home to vast deposits of copper, cobalt, and other minerals, presents immense growth potential for telecom companies. However, only a quarter of the population in one of Africa’s most populous nations has access to the internet.

The government’s demand for higher taxes comes amid efforts to harness the telecom sector’s revenue potential to improve infrastructure and bring more Congolese into the formal economy. However, telecom companies such as Vodafone and Orange refute the government’s claim that they haven’t been paying their fair share of taxes.

The standoff between the government and telecom firms escalated over several years, leading officials to seek assistance from overseas consultants. However, discussions with the consultants failed to yield favourable outcomes for the government.

In response to the companies’ pushback, President Tshisekedi’s administration took drastic measures, including confiscating passports of telecom managers, preventing one executive from leaving the country for “medical treatment”.

Following months of negotiations, a deal was eventually reached between the telecom companies and the regulator. Under the agreement, the firms agreed to pay an additional $585 million to the Congolese government by 2030.

While the episode will bolster the DRC’s tax revenues, the telecom companies say it has also hindered their efforts to expand their infrastructure in the country.