News ID: 198526
Published: 0626 GMT August 13, 2017

Congo reinstates VAT on imports for mining companies

Congo reinstates VAT on imports for mining companies
PETE JONES/REUTERS

Congo has reinstated a value added tax on mining company imports, the chamber of mines said, part of what miners say is a deteriorating business climate in the country.

Democratic Republic of Congo's government agreed to suspend the tax in July 2016 to help companies during a commodity price downturn, and to pay down hundreds of millions of dollars in VAT reimbursements owed to the companies, Reuters reported.

Major mining companies in Congo include Glencore. Randgold Resources and China Molybdenum.

Now the government is desperate to increase tax revenue in the face of severe economic problems and stubbornly low commodity prices. The franc has lost over 30 percent of its value in the past year and the central bank has about three weeks' left of import cover.

Economic problems have been exacerbated by deep unrest across the country caused by President Joseph Kabila's failure to arrange elections in time for when his mandate expired in December.

The decree suspending VAT was valid for one year, John Nkono, secretary general of the industry-led Chamber of Mines, told Reuters. The chamber had informed the government of the expiration date in July but has not heard back.

He added that the government owes mining companies about $700 million on VAT reimbursement going back several years.

   
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