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DRC Tax Reformers Struggle to Plug Leaks

FILE - A trader weighs gold nuggets at a mine-pit in Walungu territory of South-Kivu province near Bukavu, DRC, April 5, 2014.
FILE - A trader weighs gold nuggets at a mine-pit in Walungu territory of South-Kivu province near Bukavu, DRC, April 5, 2014.

A plan to reform tax collection in the Democratic Republic of Congo could help plug massive leaks in the system, experts say.

But the reform is complicated by the recent creation of 21 new provinces, and observers warn that corrupt individuals might yet find ways around the new systems.

The DRC loses around $15 billion a year in uncollected revenue, according to President Joseph Kabila's anti-corruption adviser.

Tax collection is particularly poor at the local government level. In Kasai Central, for example, provincial finance minister William Kazumba says the government is only collecting between 10 and 20 percent of what’s due.

According to Kazumba, a new automated system could help close that gap. In the future, tax collectors will print off receipts for taxpayers from their computers, or, if they are working outside of the office, from hand-held machines.

When the agent gets back to the office, says Kazumba, the machine will show what he has collected and the receipts he has given, and that will prevent the agent from handing over less than he has collected, because it can be checked.

Skepticism remains

But local politician Jim Mukenge of the opposition UDPS party does not think the system will work.

"The agents who are going around telling people to pay their taxes will use the old system. They’ll go to a store, get their cut and put the other money into the system," says Mukenge.

And minister Kazumba agrees that computers or automated devices won’t necessarily cut out fraud.

“We can’t leave everything to the machine,” he says, “because the machine is handled by a man, and if the man is corrupt he will put in false data.” “The machine can’t contradict him,” says Kazumba. “It can’t say, ‘No, what you’re telling me isn’t true!’"

Possible workaround

In theory, the machine could be a block on fraud if what taxpayers should pay is already on the machine, but whether that can be achieved here is still an issue.

VOA asked KS Infosystems, the company implementing tax reform in the province, whether it has received the taxpayers’ data.

A company spokesman said no, actually it has not received the data, but it is still training people, and afterwards they will enter the current data into the system.

One fundamental reason for automating tax collection is to cut out manual operations by human beings, says Julian Adey, lead tax adviser for consulting firm Adam Smith International.

He says there are many other problems with these kinds of reforms in developing countries. Probably the greatest, he adds, is lack of confidence about how tax money will actually be spent.