Discussions on mining tax code in Congo to be extended
Revisions to the tax structure in the draft mining code in the Democratic Republic of Congo will be reviewed for an additional week by the government and the mining companies that are likely to be effected by the changes, Reuters reported.
The two sides will work to overcome their differences over the proposed changes.
The mining chamber of the Federation of Congolese Businesses (FEC) said government, mining companies and local communities will work to overcome their differences over the proposed changes and that progress had been made regarding differences over administration of mining concessions, social and environmental responsibility, and industrial policy.
However, important differences remained concerning proposals for tax, customs and foreign exchange, FEC said in a statement.
"Given the importance of these points of divergence, which constitute a package, the government proposed a week-long delay for the different sides to review their positions so a final consensus can be reached, if possible," the statement said.
Congo has large reserves of minerals, including diamonds, gold, copper, tin and coltan. International mining companies have flocked to the copper-rich southeastern Katanga province, despite decades of violence in eastern Congo in which millions have died, many from hunger and disease.
Congo's technocrat Prime Minister Augustin Matata Ponyo has promised to improve the investment climate. The former Belgian colony ranked 154 among 175 countries in the index of corruption perceptions published last year by Transparency International.
The review of the mining code – the first since it was written in 2002 – has so far lasted two years. Planned revisions to tax measures have worried some investors.
"The mining code is likely to set out onerous new fiscal and regulatory terms," political risk consultancy Eurasia group said in a recent statement. "These likely include higher royalties, export taxes, removal of some fiscal incentives, and more equity for the government in new projects."
Congo's economy has been heavily dependent on mining for recent growth. The International Monetary Fund said it grew by 8.5 percent last year, placing it among the best performing worldwide.
Nonetheless, nearly three-quarters of its 65-million people live below the poverty line, according to the World Bank.
The government has been talking to mining companies and local groups to try to minimize the impact of any mining code changes on the levels of foreign investment.