DRC RETURNS PASSPORTS OF VODACOM, OTHER MOBILE FIRM EXECS
...after they agree to new tax law - report
KINSHASA - The Democratic Republic of Congo returned passports to phone-company executives after they agreed to sign up to a controversial new tax law, according to people familiar with the matter.
The deal was brokered with the African nation’s four major carriers - Orange SA, Airtel Africa Plc, Vodacom Group Ltd. and Africell Holding SAL - and was negotiated after the government banned executives from leaving the country, said the people, who asked to remain anonymous as the information is still private.
Approval for the executives to travel again is expected in coming days, they said.
While the framework of the agreement is similar to the initial demand, a cap has been placed on how much operators can owe the state, said the people.
The limit is set at $65 million next year and $70 million annually from 2024, divided up between the companies according to their market share, they said.
Airtel, Vodacom and Africell declined to comment on the matter. Orange didn’t respond to requests for comment. Congo’s telecom regulator Christian Katende didn’t respond to multiple messages requesting comment.
The carriers initially rejected the levy as “irregular and therefore unenforceable,” the Federation des Entreprises du Congo, the country’s main business association, said previously.
Congo’s plan to increase takings from telecom operators follows numerous similar initiatives around Africa, where phone companies carry great influence due to their revenue-generating mobile-money services. For their part, wireless carriers argue that taking more of their profit will force them to cut investment.
In Congo, they will not be allowed to pass the additional cost onto consumers, the people said. The Congolese government is looking for ways to shore up its finances after years of mismanagement and corruption.
President Felix Tshisekedi’s administration plans to broaden its tax base and boost revenue as it undertakes a nationwide infrastructure development plan ahead of elections scheduled for the end of next year.