Govt, cellcos continue to scrap over taxes and tariffs

13 Jun 2022

Congolese business organisation the Federation of Companies of Congo (La Federation des entreprises du Congo, FEC) has issued a statement clarifying its position regarding price hikes in the mobile segment, after industry watchdog Regulatory Authority of Post and Telecommunications (Autorite de Regulation des Postes et Telecom, ARPTC) warned that it had not approved any such price increases.

As previously reported by TeleGeography’s CommsUpdate, the FEC had claimed that increases in taxation on the sector would result in higher prices for consumers. The ARPTC responded by dismissing the reports as false, stating that no tariff increases had been approved and warning that any provider illegally raising prices would be severely sanctioned.

Explaining the matter in more detail, the FEC notes that its original claims were with regards to taxes levied on providers on calls, messages and internet use that were introduced in March and April this year. According to the FEC the invoices issued to the providers for the period from 24 March to mid-May 2022 represents ‘several tens of millions of US dollars’. As such, the FEC said, operators would be obliged to adjust prices to integrate the new charges into their price structures. The body goes on to argue that operators are permitted to increase prices, as the law requires that tariffs are oriented towards costs. Consequently, the FEC considers it: ‘inadmissible for the government to set up new taxes in favour of the ARPTC to remunerate its services on the one hand and does not accept to assume the logical consequence of a subsequent increase in the prices of these new charges on the other side.’

In a related development, Bloomberg cites people with knowledge of the matter as saying that the nation’s four main cellcos – Vodacom Congo, Orange DRC, Airtel DRC and Africell – had been issued the regulator’s invoices through consulting firm 5C Energy. The quartet reportedly rejected the notices as ‘irregular and therefore unenforceable’ and are refusing to pay the demands. The new taxes are expected to cost providers around USD180 million per year.