DRC: the tax authorities claim $572 million in tax arrears from Vodacom, Airtel and Orange
December 12th 2022
An audit carried out by the Congolese authorities accuses 3 telecom companies of tax evasion offenses over the period 2016 – 2019. The General Directorate of Taxation has initiated the process of recovering the funds owed to the State.
The Directorate General of Taxes (DGI) of the Democratic Republic of Congo is claiming $572 million in tax arrears from the telecommunications companies Airtel RDC, Orange Congo and Vodacom RDC. These operators owe 260 million, 147 million and 165 million USD respectively.
The sum claimed from the telecom operators constitutes, we learn, an adjustment resulting from a tax audit carried out by the DGI and covering the period from 2016 to 2019. The local press also reported this week that the premises of Vodacom were put under seal, and his bank accounts frozen in connection with this case.
However, the company declares that it has, “ in accordance with tax legislation and relevant procedures, contested the said adjustment by exploiting all the administrative remedies which led the Tax Administration to proceed on August 16, 2022 with the notification of a decision of partial relief by maintaining the taxes of around 165 million USD ”.
In recent years, the question of taxes has been the subject of recurring disputes between the government and the telecom companies. In August, Congolese authorities confiscated the passports of representatives of Orange, Airtel, Africell and Vodacom, following their refusal to pay new taxes introduced by the Post and Telecommunications Regulatory Authority of Congo (ARPTC) in March. The first invoices sent via the consulting firm 5C Energy amounted to 20 million USD, approximately for the period from March 24 to mid-May 2022.
The coercive measures undertaken by the DGI should encourage Vodacom RDC and the other telecom companies involved in this case to find common ground with the tax authorities as soon as possible. The sealing of Vodacom’s premises could affect the quality of services provided to subscribers, including customer service. In addition, the freezing of the telecom company’s accounts could reduce investments in the market.
However, Vodacom wanted to assure the public that “ all adequate measures have been taken to ensure the continuity of its services vis-à-vis its customers ”.
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