[ANALYSIS] – Since the introduction of the Value Added Tax (VAT) in the Democratic Republic of Congo, several pitfalls have been recorded, making it difficult for the mobilizing services. Among these pitfalls, it is noted inter alia, the reduction of figures by some economic operators to escape the tax. Hence, the need and the urgency to strengthen the control of the taxable persons.
According to the law, VAT is collected from consumers by economic operators who, in turn, return it to the Treasury account through the Directorate General of Taxes (DGI).
In the field, the mobilizing services sometimes face non-compliant practices that do not make it easier for tax officials.
In Kinshasa, for example, many store, shop and other store owners where sales are done in detail do not bill when items are sold. This, contrary to the provisions of the law instituting VAT in the DRC. This allows them to lower the numbers to avoid the payment of VAT due.
« We realize, on average, the equivalent of 45,000 US dollars in terms of daily sales. Nearly ¾ of our buyers leave without a lower invoice following the instructions received from the owner of this store. This allows us, it seems, not to pay significant sums to the DGI in terms of VAT collected. We are forced to do this to preserve our work in a country where finding a decent job is an obstacle course, « said an employee in a shop run by foreign subjects.
Tactics to escape the tax are legion. Other economic operators organize themselves by falsifying the figures. This also allows them to lower the VAT recovered. Which does not favor tax optimization.
In the face of this incivic behavior, the tax administration is sometimes faced with serious technical difficulties, since the legislation provides for the declarative system.
According to specialists interviewed on this subject, the Congolese State has a lot of work to do in this area. To avoid such situations being recurrent, some suggest, awareness campaigns should be regularly organized not only for the benefit of economic operators but also and especially for the attention of tax officials.
Above all, it is advisable to set up a computerized system for the permanent control of the collection of VAT in supermarkets in particular.
An important reform
Since 1 January 2012, Turnover Tax (ICA) has been replaced by the Value Added Tax (VAT). For the experts, it was a big innovation introduced by the DRC government.
According to them, this tax mainly targets three essential pillars of development. In particular, the competitiveness of local production, the intensification of economic activities and the improvement of the business climate.
In the first year, the DGI set itself the goal of raising nearly 650 billion Congolese Francs in 2012, an increase of 40% compared to the revenues of the 2011 financial year.
For a better success of this reform, the DGI officials called for a correct application of these devices by all economic operators. As for the Congolese population, the experts reassured that « the VAT would not have a negative impact on the price practiced on the market ». All the arrangements had been made.
Require invoices for each purchase made is the new behavior that the tax administration wanted to inculcate in the Congolese population.
« It took seven years of a laborious process, punctuated by several exchanges with industry experts for VAT to enter the tax microcosm of the DRC, » said a senior executive of the DGI.
VAT is a modern tax applied in several countries. It is not a cumulative tax. Therefore, economic operators are not required to be able to claim the exemption in order to circumvent it, as was the case with the ICA.
« Fraudsters will be spotted, regardless of the level of their deception, » said the senior executive of the DGI.
At the launch of the VAT, tax administration officials said that « the mechanisms put in place make it possible to identify all taxpayers. Therefore, if someone realizes a turnover of 80,000 CDF, for example, and has taxable transactions, the DGI invites him to be identified as soon as possible, with his services. Otherwise, the penalties inevitably apply.
Olivier KAMO