Congo-Kinshasa: high mobile taxes hinder economic growth in the DRC

By Jean Kbadongo

Kinshasa – EXORBITANTE-specific mobile taxation hampers mobile adoption and potential growth in gross domestic product (GDP) in the Democratic Republic of Congo (DRC).

System for Mobile Communications (commonly known as GSMA), which called on the government to initiate tax reforms and improve the economic well-being of millions of citizens.

The recommendations are included in a report of the GSMA entitled "Reforming Mobile Sector Taxation in the DRC: Promoting Economic Growth Through a Favorable Tax System."

The report, written by Ernst & Young (EY), Analyzes the potential benefits of a more efficient tax structure for the mobile sector in the DRC, with a focus on increasing affordability and unlocking digital inclusion.

The report finds that the implementation of tax reforms would benefit the economy in general and the government's fiscal position

According to him, an acceleration of mobile penetration in the DRC would lead to a growth of productivity in the overall economy, increasing GDP, household income, employment and investment.

John Giusti, Chief Regulatory Officer of the GSMA "Reforming Mobile Sector Taxation Would Deliver Broad Socio-Economic Outcomes for the DRC, which is already one of the most dynamic digital economies in the world." Africa

Currently, the executive estimates that the mobile sector's tax burden remains among the most "Our report highlights the need for mobile sector taxation that allows for a better balance between maximizing revenues, economic growth and social development, "said Giusti 19659004] GSMA research shows that the mobile industry is playing an increasingly important role in economic growth and digital inclusion across the country of Central Africa.

The number of mobile subscribers has increased considerably, from 4.9 million in 2007 to 29.3 million in 2017, with an average annual growth rate of 20% . [196] 59011] The unique penetration of subscribers increased from 8.2% to 35%, The mobile phone sector generated an economic value of $ 1.1 billion in 2017.

The GSMA report concludes that There is still a significant opportunity to increase mobile penetration and increase GDP through mobile policy reform.

In the DRC, taxes on the mobile phone sector are disproportionately high compared to other African countries. The mobile sector accounts for about 20% of total tax revenues, although it accounts for only 3.6% of GDP, which means that the total tax contribution of the mobile sector is almost six times higher than the GDP in terms of GDP.