Tax collection goes back to age-old times in history. In the Roman times, there were people responsible for collecting taxes who went around with wicker baskets which they used to transport gifts that the people offered to the Emperor Caesar, through taxes. These baskets were called “Fiscus Cesares” which means “Caesar’s treasures”, hence the term “fisc” which currently denotes the administration responsible for calculating taxes due and to collect them on behalf of the State.
Regarding the tax system in the Democratic Republic of Congo, our ancestors also knew about taxation but in the form of deductions in kind (Dimandja, undated). Indeed, in pre-colonial times, village chiefs had the right to a part of hunting or harvest produce. When a distinguished visitor was being welcomed, they called on their subjects to contribute hens, eggs and goats so as to cover the costs of this particular visit. In their turn, they were supposed to provide banquets, to feed judges and soldiers and to offer goods to the needy among their citizens.
All in all, the chiefs were responsible for finding remedies for problems likely to affect the public health of villagers, their personal safety and the safety of their goods. In order to achieve this, the support of each and every person was required.
When colonial authority arrived, the Congolese of days gone by knew another type of tax called the “capitation tax” (caput means head) which means “tax per head”, which consisted of a tax on each individual, without taking into account their resources or their assessments for tax.
The aim of this tax was to obtain revenue for the State and particularly to combat inactivity by obliging those people liable for tax to get the necessary money to pay tax, thus forcing natives to abandon an economy of subsistence and to develop a market economy. Following on from this, a number of citizens developed trading and craft activity. Thanks to their determination and their business sense, they succeeded in creating quite significant and prosperous business. Others, luckily, occupied functions which had up until then been carried out by Europeans.
Like all tax systems, the Congolese tax system is characterised by the multiplicity of taxes notably:
• direct taxes on revenue;
• indirect taxes on
spending; and
• taxes on capital.
Due to the regulatory effect of taxes in relation to the present state of the economy, taxation can be either spontaneous or organised by the authorities. For example, progressive taxes on revenue for immediate payment. Such a tax, at a time when revenue is increasing, always levies a bigger part of revenue, thus limiting the possibilities for saving and investment.
Structural tax policies can work in encouraging or discouraging certain types of businesses. To encourage certain business people to transfer their activity to new areas for development, the State generally grants aid in two forms.
• Positive form: through subsidies and very low
interest loans.
• Negative form: through exemptions or reductions in tax payments.
The Congolese State can also protect national industry by raising the tariffs on the rights of entry on foreign products in competition with similarly made products made in the country, thus practising interventionism.
The importance of Congolese taxation is recognised at two levels of influence.
The economic level. Positive influence - the State can promote national and foreign investment in sectors deemed to be priority areas for tax exemption and other tax advantages. Depending on the effect of costs, taxation can play an anti-inflationary role. Negative influence - taxation can also paralyse economic activity if tax rates are too high.
The social level. The State uses tax to ensure the redistribution of revenue. The same applies to those citizens who benefit from reductions because they have several children in their homes.
Tax revenue and its redistribution in the country is an integral part of an accounting tool called the national budget. For this reason, we have deemed it appropriate to present here as follows, in few words, the national budget of the Democratic Republic of Congo before dealing with its forestry taxation.
All institutions that aspire to rational management must have a vision and a more or less overall understanding of the process of evaluating and implementing the budget. Thus the budget can be defined as all the forward-planning annual accounts of resources and responsibilities of the State, of communities and public establishments.
In conformity with Order-law number 774/002 of 2 January 1974 amending and supplementing Order-law number 69/0014 of 5 December 1969 pertaining to financial law, the Ministry for Finance is responsible for the preparation of the budget from tax revenue. This role gives it the title of the Ministry of Revenue. The instructions relative to the drafting of the budget of current spending are provided by the Ministry of the Budget. The budget is drafted in the form of a summary table with three columns where item by item the following elements are mentioned:
• finances used in year X-1;
• finances allocated
for the same items in year X; and
• finances in year X+1 suggested by
financial officers to the budget controllers.
To these elements, there is a table of the number of staff including the personnel under statute and temporary staff, all in six copies and distributed as follows:
1. a copy to the service concerned;
2. a copy to
the controller of spending;
3. a copy to the head of the division or
office for the provinces;
4. a copy to the ministry for central services
and to the governors of provinces; and
5. two copies to the Ministry for Finance.
The Congolese State budget is made up of two large parts divided into the headings of revenue and expenditure as follows:
1. revenue in the budgetary framework; and
2. revenue for social security.
In the revenue contained in the budgetary framework, there is tax revenue and non-tax revenue (Central Bank, 1995).
Tax revenue is made up of:
1. taxes on foreign trade;
2. taxes on the
revenue of persons, companies, firms and fines;
3. taxes on goods and
services;
4. exceptional taxes on payment of wages, paid by
employers;
5. special funds for boosting the economy, agriculture and
other;
6. other; and
7. Gécamines.
Non-tax revenue is made up of:
1. administrative, judicial and land revenue;
2.
portfolio revenue;
3. royalties;
4. Office for Management of Public
Debt; and
5. other.
With regard to the spending budget, it is made up of the institutions as follows:
1. political institutions (Presidency of the
Republic, government, Prime Minister’s Office etc.);
2. ministries (more
than 25);
3. other services; and
4. spending on order.
Once the budget is approved and promulgated by the parliament, the budget should be implemented and applied. The implementation of the budget is not an automatic exercise. There are the requirements of management to be allied to the demands for rigorous methodology.
It is the act which legally obliges the State to take on the task of spending and this act thus renders the State a spender. Nevertheless, the State only becomes a spender definitively when the act that causes the spending is completed. The authority in power approves expenditure and manages the approved spending. Each ministry is by right, the main manager of its own ministry’s budget.
This is the observation and checking of its authenticity and legality allowing for a determining of its exact amount and to charge it to the appropriate budgetary loan. A provisional liquidation is carried out by persons authorising expenditure from each ministry or province. Exception being made for fixed spending or State subsidies, those authorised proceed to examine the letter of debt and establish their concordance with the service rendered and with the clauses of the initial commitment.
Definitive liquidation is operated by the public revenue offices who monitor the admissibility of what is to be taken on by the treasury by ensuring the quality of documents attached to the declaration of debt, who checks that there is no duplicating with expenses already liquidated and if legal and regulatory provisions have been well observed and which, finally, monitors the regularity of charging the expenditure to the article of the budget to which it is linked.
Liquidation, once completed, incurs the recognition of the debt by the State.
This is the second last stage before payment. It is an order issued by the Ministry for Finance or by a delegated representative to the State cashier or accountant of the public revenue department to pay the debt in accordance with the liquidation. Certain expenses outlined by law can be paid without previous authorisation and others are regularised after payment.
This is the accounting stage of implementing the spending budget, which brings about extinguishment and is carried out by a payment in cash or more often by cheque or bank transfer. The bank monitors and carries out payment orders and transfer orders or orders for funds to be forwarded, and it issues letters of credit or credit advice in the name of designated beneficiaries.
Following this overview of taxation and the Congolese budget, we can say a word here about taxes which sustain the budget (Dimandja, undated).
Tax and its characteristics. It is an obligatory pecuniary payment which is definitive and without immediate compensation on the resources of physical and moral persons. It is used to cover expenditure in the general interest of a community. It is characterised by the following eight features:
1. tax is a means of transferring taxpayers’ buying
power;
2. tax is a benefit in money, in cash;
3. this benefit is not
followed by apparent immediate compensation by the public authorities;
4.
coercion is a fundamental characteristic of tax;
5. tax is the means at
the State’s disposal for policy implementation;
6. tax is determined and
collected according to fixed rules and not arbitrarily depending on the good
will of the tax administration;
7. tax is owed by individuals and
societies due to the fact that they form an organised political community
(the State) or because they benefit from revenue or some kind of advantage;
and
8. tax is brought to the budget.
Fees. Fees are a pecuniary payment that go to a specific and defined service and which are only paid by individuals who receive a specific State benefit.
All forestry analysts are unanimous in recognising that the Democratic Republic of Congo, an immense country with a very large surface area at the heart of Africa (2,345,000 km²), has equally immense forestry resources estimated to be 128 million hectares. This last figure represents 58% of all tropical forests in the Congo basin and more than 52% of African tropical forests (IBRD, 1971). Table 1 below shows the distribution of forestry zones in Africa.
Country |
Total forest area |
Dense forest area | ||
‘000 km² |
% |
‘000 km² |
% | |
Democratic Republic of Congo |
129 |
38 |
90 |
52 |
Angola |
72 |
21 |
2 |
1 |
Nigeria |
31 |
|||
Cameroon |
24 |
|||
Gabon |
20 |
|||
Congo |
20 |
36 |
75 |
43 |
Ghana |
14 |
|||
Ivory Coast |
12 |
|||
Central African Republic |
2 |
|||
Other |
17 |
5 |
7 |
4 |
Total |
341 |
100 |
100 | |
IBRD (1971).
