DRC: The mining royalty paid by companies amounted to 951.42 million USD for the first half from 2018-2020

From 2018 to the first half of 2020, the mining royalty paid by companies working in this sector to the Public Treasury, the Mining Fund for Future Generations (FOMIN), the Provinces and Decentralized Territorial Entities (ETD) amounted to 951.42 million of US dollars.

Of the total amount paid by companies, 589.5 million USD was paid to the National Public Treasury, 225.1 million USD paid to the Provinces and 112.5 million USD collected by the Decentralized Territorial Entities. This is what emerges from the Relaxed Report 2018, 2019 and 1st Quarter 2020 of the Extractive Industries Transparency Initiative (EITI DRC).

According to this document, during this period, the expected mining revenues and those actually collected are as follows:

• The central public treasury, which has a quota of 50% on the total collected revenues, collected 589.50 million US dollars during this period against the forecasts of the order of 810.61 million US dollars, that is to say a rate of perception amounted to 72.7%;

• The provinces which have a quota of 25% received a total amount of 225.10 million US dollars against the linear forecasts stopped at 400.21 million USD, that is to say an execution rate of 56.2%;

• The Decentralized Territorial Entities, with a quota of 15%, received 112.50 million against the linear forecasts amounted to 240.32 million US dollars, ie an achievement rate of 46.8%;

• The Mining Fund for Future Generations with its 10% quota received an amount of 23.10 million USD against forecasts of around 149.32 million USD, ie a collection rate of 15.4%.

The total revenue collected under the mining royalty during this period amounted to 951.42 million USD against the forecast of the order of 1,600.52 billion USD.

In its report, the EITI indicated that for not having accessed the debit notes making it possible to determine the expected revenue, the revenue actually collected by the DGRAD for 50% of the portion of the mining royalty accruing to the Public Treasury were considered as the basis for calculating the other quotas.

The total is 649 million USD, or 28% of the total amount of the mining royalty, while the basis of the calculation starts from the revenue actually collected by the DGRAD from the portion of 50% of the mining royalty on behalf of the Public Treasury.

To this end, the discrepancies observed sufficiently prove both the non-payment of this tax by certain mining companies and also the lack of transparency in the collection
and distribution of the mining royalty.

The EITI reports that the absence at the level of ETDs, and even for some provinces, of Development Plans, Annual Investment Plans, participatory budgets, procurement mechanisms, execution processes and monitoring budgets makes the benefits of grassroots management less effective and prevents capitalizing on this windfall that is revenue from mining royalties.

Also, the lack of preparation of ETDs to ensure sound and transparent management of the
mining royalty, in addition to the interference of the provincial power in the management of the royalty and the absence of clear orientations given by the public powers constitute the primary reasons here. these documented deviations in relation to the legal provisions in force in this area.

The declarations of payments made by mining companies to the EITI Technical Secretariat, as part of the flexible EITI DRC Report 2018, 2019 and 1st Semester 2020, highlight serious inconsistencies, in particular:

• Several companies have, during the three periods under review, paid certain taxes, duties, taxes and royalties without paying the
mining royalty;
• Some have paid the portion of the mining royalty due to the Central State and the Provinces and have not paid those due to ETDs and
the Mining Fund.

• All the scenarios could be observed during this pivotal period when the effects of the revised Mining Code of 2018 came into action.

In addition, in this report the EITI notes the absence of local staff in the ETDs, trained to prepare the perception notes. Currently, these ETD perception notes are developed by
a group of four people unilaterally appointed by the Province who
tour all ETDs for this purpose. This not only creates a
delay in the establishment of perception scores and confuses the quantities and the actual amount from which the ETD benefits but above all deprives
the ETD of its financial management autonomy.