Africa Mining Circle, September 14: The Democratic Republic of Congo said on Saturday that it will return value-added tax to mining companies operating in the country.
Earlier, a decision by the Democratic Republic of the Congo to stop the return of value-added tax caused a strong response. Currently, an ongoing audit will determine how much VAT owes these mining companies.
Since July 2016, the Democratic Republic of the Congo has suspended VAT on mining imports to help mining companies during the downturn in commodity prices and return hundreds of millions of dollars in VAT owed to mining companies.
In August of this year, due to funding constraints, the Congolese government stated that it would suspend tax exemptions to boost government revenues that have been hit by the impact of the coronavirus pandemic.
According to official meeting minutes, the government budget minister Jean-Baudouin Mayo (Jean-Baudouin Mayo) said at a cabinet meeting on Friday that after strong opposition from mining companies, the government said it would set up a joint committee with mining companies. To determine the amount of value added tax that needs to be refunded and the terms of the refund.
According to the official meeting minutes, Mayo said: “The government promised to refund the value-added tax credit to miners after auditing the actual value-added tax stock.”
It is unclear how much the Congolese government currently owes mining companies, including Glencore, China Molybdenum and Barrick. The amount owed in 2016 was approximately US$700 million.
The Democratic Republic of Congo is the world's main cobalt mining country, which is used to make electric car batteries.
Congo’s economy has been hit by the coronavirus crisis, and demand for copper and other commodities has been hit hard. According to the central bank’s forecast, the country’s economy will contract by 1.7% this year.
