Vodacom executives banned from leaving country

The Democratic Republic of Congo has banned some telecommunications executives from leaving the country after they resisted paying a new tax on the industry, according to people familiar with the matter.

Executives from the country’s four major carriers — Orange SA, Airtel Africa, Vodacom, and Africell Holding, — have been prevented from traveling and some have had their passports taken, the people said, asking not to be identified because they aren’t authorized to talk about the travel bans.

The government decree increases the tax on carriers’ revenue to 35% from 20%, one of the people said.

The carriers initially rejected the new levy as “irregular and therefore unenforceable,” the Federation des Entreprises du Congo, the country’s main business association, said in June after Bloomberg’s initial report.

Orange’s local chief executive officer and Africell’s DRC finance chief were blocked from leaving the country and had their passports confiscated at the Kinshasa airport earlier this month, according to a letter from the FEC to the interior minister that was seen by Bloomberg.

A Vodacom executive had her passport taken when she returned from a trip, one of the people said.

“To this day, no reason has been offered to the executives that justified these actions,” the letter said. The business group said it was “worried” and “strongly concerned by this measure affecting company directors, notably, those of the telecommunications sector.”

Representatives for Orange, Vodacom, Airtel, and Africell declined to comment.

FEC head Kimona Bononge said the group is engaging with the “highest authorities of the government on this subject,” and declined to comment further.

Representatives for the government and telecoms regulator didn’t immediately respond to requests for comment.

The government is looking for ways to shore up its finances after years of mismanagement left the country without the revenue it needs.

President Felix Tshisekedi’s government wants to broaden its tax base and boost its revenue as it undertakes a nationwide infrastructure development plan before elections scheduled for the end of next year.

Congo last year dropped a plan to tax mobile operators, following opposition from the public as it could lead higher costs.