Turbulence in DRC telecoms as news of another mobile tax breaks
The Democratic Republic of Congo (DRC) is reportedly preparing to implement new taxation parameters for the mobile telecommunications industry, just a few months after public pressure forced authorities to back down on a mobile gadget levy.
The central African country’s ICT and telecommunications industries continue to attract investment as companies look to fund technology and internet connectivity infrastructure projects.
Liquid and Intelsat have been ramping up connectivity infrastructure in the DRC, while Airtel has just procured additional spectrum to the value of US$42-million to enable it to expand its 4G network coverage across the country.
However, the new tax moves for the mobile industry by the government could have an impact on usage volumes and revenue for the operators.
DRC-based legal expert Junior Luyindula foresees an increase in taxes. In a message posted on Twitter, Luyindula said, “Federation of Businesses of the Congo (FEC)’s telecom commission (says) that a hike in telecoms tariffs was on the way. Operators said last week they had no other choice than to raise the tariffs of the various services.”
Bloomberg reported this week that mobile operators in the DRC, including Airtel, Vodacom, Orange and Africell, have received bills for the new taxation from the government via an appointed consultant agency.
The new levy, which is reportedly calculated at a percentage of revenue from all services, is understood to be targeted at several telecommunications services including data, voice and SMS.
Media reports show that the new tax amounts to about $0.0075 per minute of talk-time, $0.003 per short message text and $0.00005 per megabit of data consumed.
The FEC business and commerce grouping for Congolese companies wants to engage with the government.
ITWeb Africa was told on Wednesday that the operators, via a sub-chamber of the business grouping, disagree with authorities regarding the proposed tax.
A telecommunications industry manager at a regional services provider, who spoke on condition of anonymity, said, “It was set to take effect at the end of April and operators there have been billed various amounts for a period of slightly over six weeks.”
He added, “They are disagreeable with the tax and are seeking engagements with the government to have a clear understanding and to push for them to be able to also pass a portion to telecom users.”
In February this year the FEC requested Congolese Minister of Finance, Nicolas Kazadi, to withdraw the November 2021 decree which industry players believe sets the parameters for implementation of the new tax system for various services and products, including telecommunications.