Mining industry welcomes Congo's VAT policy change as 'win-win'
JOHANNESBURG, Sept 14 (Reuters) - Congo's Chamber of Mines on Monday welcomed a proposed change in the government's tax policy which would exempt mining companies from value-added tax on imports upfront, rather than promising VAT reimbursements which have been slow to materialise.
The world's top cobalt producer has suspended the VAT on mining imports since July 2016, but in August, the cash-strapped government alarmed the industry by announcing it was suspending the tax exemption in an effort to bolster its coffers. After discussions with mining companies, Congo on Saturday said it will reimburse value-added tax payments to firms operating in the country following an audit to determine how much it owes them.
Chamber of Mines President Louis Watum estimated the backlog of VAT reimbursements which the state owes mining companies has grown to more than $1 billion. The debt stood at about $700 million in 2016.
Watum said the change in policy is a "win-win" and sends a positive signal to the global investment community. He expects the new system of upfront VAT exoneration, dubbed "auto-liquidation", to come into effect by the end of the year, he said.
(Reporting by Helen Reid; editing by David Evans)