CD Government Imposes New Taxes on Digital Services: Decree Sets Out Rights, Taxes, Fees

• The Democratic Republic of Congo's government has introduced a new decree setting out taxes and fees for digital activities.
• Digital platforms, including online financial services and fintech applications, must pay authorization fees ranging from $3,000 to $10,000.
• Developers from Congolese startups will benefit from a preferential tariff of $100 for their approval.
• The decree provides for sanctions in case of non-compliance, including fines up to 200% of the required fee.

Soumettre des startups, parfois encore sans aucun revenu, à des droits d'autorisation pouvant atteindre plusieurs dizaines de milliers de dollars est une aberration économique.

The Democratic Republic of Congo's government has introduced a new interministerial decree that sets out the rights, taxes, and fees applicable to digital activities. Signed by the ministers of Digital Economy and Finance on July 28, the decree imposes new financial obligations on digital operators and provides for sanctions in case of non-compliance. The authorities claim this reform aims to better regulate a rapidly expanding sector, strengthen its oversight, and encourage investments in technological infrastructure.

The decree introduces authorization fees for digital platforms, with online financial platforms, including banks and fintech applications, required to pay $5,000 for operating licenses. Other digital platforms, such as transportation, travel booking, and accommodation services, will be subject to a $3,000 fee for local operators and $10,000 for foreign operators. The decree also establishes an approval regime for various categories of digital services. Developers from Congolese startups will benefit from a preferential tariff of $100 for their approval, aimed at encouraging local innovation.

Lawyers advising clients on digital services in the Democratic Republic of Congo should be aware of potential compliance exposures and review their business models to ensure they can meet the new tax obligations and regulatory requirements. The decree's provisions may impact profitability, particularly for startups and small businesses. Opponent Martin Fayulu has criticized the reform as a 'barrier to innovation', arguing that it will discourage entrepreneurs and encourage the growth of the informal economy.

Lawyers advising clients on digital services in the Democratic Republic of Congo should watch for potential compliance exposures and review their business models to ensure they can meet the new tax obligations and regulatory requirements, which may impact their profitability.

Source: Original reporting via Le Moniteur du Congo