The Democratic Republic of the Congo (DRC) Seals portions of Vodacom Group’s offices and froze its local bank accounts over tax disputes. The general directorate of taxes conducted an examination for the years 2016 to 2019 and determined Vodacom Congo owed $243 million.” On 6 and 7 December 2022, agents of the General Directorate of Taxes presented themselves at our technical, commercial, and administrative offices and proceeded with the installation of seals,” according to the statement.
Vodacom objected to the choice and filed a legal appeal last month, he claimed, but the Directorate-General for Civil Rights had already started the process to reclaim the money forcibly.
By enforcing taxes and preventing service providers from boosting prices, the DRC government has been engaged in a never-ending battle with telecom companies.
The tax replaced another levy that had been repealed a month earlier as a result of public outcry and a legislative investigation into how the funds were used.
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The claims have not been verified, and the allegations have not received a response from DRC authorities.
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Previous Tax Disputes
This tax superseded one known as the “phone tax,” which assessed fees on the purchase of electronic devices, prompted a parliamentary examination, and was ultimately eliminated.
Over the previous few years, Congolese business owners and the government have been involved in several tax conflicts that have culminated in the last year. In March 2022, the government implemented a new tax system that levies costs for voice minutes, phone calls, text messages, and data consumption. Operators objected to the adjustment and reportedly withheld payment of their initial $180 million worth of invoices.
In August, officials from the country’s operators Africell, Airtel Africa, Orange, and Vodacom were reportedly denied passports and were prohibited from leaving the country after failing to pay taxes required by the March mandate.
“Vodacom continues to use all the means of recourse provided by the legislation in force to ensure that the law is established and is awaiting the outcome of the procedures underway before the various competent judicial and administrative bodies,” it says
Oomar Chutoo, the chief financial officer of Vodacom DRC, was imprisoned in 2020 as a result of other conflicts. He was detained for four days after being accused of forging and fabricating bank statements. A year later, a Vodacom engineer was detained on suspicion of fraud in connection with the contentious ARPTC mobile device register. The operator described the arrest as “arbitrary” and “intimidation” when the telecoms regulator claimed that files taken from Vodacom were deleted by the Vodacom employee (Vodafonewatch, #189 and #198).
Vodacom Growth Report
Despite the uncertainty surrounding the global economic recovery, rising inflation, and turbulence in the financial markets, telecom giant Vodacom Group has announced growth across all of its revenue streams. Vodacom announced on Thursday that its group revenue increased by 5.2% year over year (YoY) to 26.1 billion South African rands ($1.52 billion) for the three months that ended on June 30, 2022. While the operator’s home market of South Africa saw service revenue climb by 3%, the operator’s overseas service revenue increased by 10.4% thanks to data revenue growth and a lower rand.”Vodacom Group produced a resilient first-quarter performance despite the turmoil in financial markets and uncertainty about the recovery of the global economy as a result of COVID-19 and the Russia-Ukraine conflict. Inflation continues to accelerate in most of the markets where we operate, which means that the cost of living has climbed,” CEO of the Vodacom Group Shameel Joosub made a statement.
The growth in service revenue for overseas operations, which was supported by an 11.8% increase in M-Pesa income and a 23.4% increase in data revenue, reached R5.9 billion ($344 million).