Around the same time, the Government agreed to suspend the exemption from VAT on imports from mining firms.
The Congolese authorities revoked the VAT exemption given to mining operators in the Democratic Republic of Congo and encouraged them to repatriate 60% of their foreign exchange earnings in order to stabilize the local currency, as learned from government and banking sources on Monday.
The exemption from value added tax ( VAT) on imports given to mining companies was agreed by the government at the end of March to reduce the negative impact of COVID-19 on the Congolese economy.
“The Council of Ministers agreed, at its 41st meeting and in the light of the mobilization of state revenue by the financial authorities, to suspend the exemption from VAT on imports from mining firms,” the Congolese budget minister wrote to his finance counterpart in a letter dated 31 July.
This measure, which should be implemented “without delay,” is being taken at a time when government earnings have dropped due to the contraction of economic activity and the overheating on the foreign exchange market, which is causing inflation to increase in the DRC.
For his part, the governor of the Central Bank (BCC), Déogratias Mutombo, called on mining companies to repatriate 60% of their revenues to ensure the stability of the Congolese currency and economy, pledging to “strengthen monitoring” the enforcement of this activity, in a video shared with the media on Monday.
“The mining companies generated a little more than last year in terms of copper and cobalt,” he said, adding that “the price of copper has surpassed the market level before the Covid 19 pandemic. We’re at $6,400 a ton.”
According to BCC statistics, mining businesses based in the DRC produced a total of 765,533 tons of copper in the first half of 2020 compared to 675,157 tons in 2019. The Congolese Mining Code allows mining operators to repatriate 60% of their export earnings through the country’s banking system.
Source: La Tribune Afrique
