DRC Mining Audit Uncovers Major Shortfall in Funds for Community Development

DRC Mining Companies Underreport Billions in Revenue, Dodging Millions in Community Development Contributions

As part of its 2024 annual activity program, the Democratic Republic of Congo’s (DRC) Court of Auditors conducted an audit on the management of a mandatory 0.3% turnover contribution by mining companies toward community development projects.

This audit covered the period from 2018 to 2023 and focused on the compliance of mining companies operating in the production phase, as required under Article 258 bis of the DRC Mining Code.

The Court’s investigation uncovered substantial irregularities that undermine the purpose of this levy, which was designed to help offset the negative impacts of mining activities on local communities.

A core issue identified was the consistent underreporting of turnover by several mining companies to specialized regulatory bodies.

While companies such as Kibali Gold Mine, Macrolink, and Jiayuan Mining were found to have accurately reported their revenues, others—like Om Metal Resources (OMR), Shituru Mining Corporation (SMCO), and Société de Traitement du Terril de Lubumbashi (STL)—failed to report any turnover at all. Additionally, no turnover declarations could be verified for New Minerals Investment and Kambove Mining SA.

According to data obtained by the Court of Auditors from the General Directorate of Taxes (DGI), most mining firms reported significantly lower turnover figures to specialist bodies compared to those submitted to tax authorities.

A detailed reconciliation revealed that mining companies declared USD 81.4 billion in turnover to specialist organizations, while reporting USD 98.2 billion to the DGI—a discrepancy of USD 16.8 billion.

This underreporting resulted in a shortfall of over USD 50 million in the 0.3% community development contributions.

The report attributes this widespread underreporting to systemic weaknesses, particularly the absence of a mechanism within the Supervisory Committee to verify the turnover figures submitted to specialist bodies.

This oversight gap has allowed companies to exploit the system and reduce their financial obligations unlawfully.

“This fraudulent practice is facilitated by the lack of verification tools within the Supervisory Committee, which currently relies solely on the turnover declarations provided directly by the mining companies.”

In its defense, the Supervisory Committee noted that the DRC operates under a declarative tax system, where taxpayers are responsible for submitting accurate information.

Attempts to cross-verify declarations with the DGI had proven ineffective, prompting the Committee to rely solely on figures provided to specialized organizations.

Despite the limitations of a declarative system, the Court of Auditors emphasized that this does not exempt the administration from conducting post-declaration audits.

It urged the Supervisory Committee to implement a robust verification mechanism, possibly by:

Collaborating closely with the General Directorate of Taxes (DGI)

Mandating annual audits of reported turnover by an independent body such as the Court of Auditors

Additionally, a joint verification mission involving the Inspectorate General of Finance (IGF), the General Mining Inspectorate (IGM), and the Supervisory Committee has already been scheduled.

This mission will be aided by the comprehensive findings provided by the Court of Auditors.