Congo to review copper, cobalt taxes: PM

By Katrina Manson

KINSHASA (Reuters) - Congo is to reconsider taxes levied on exports of semi-processed copper and cobalt after appeals from the country's business community, which says illegal taxes are crippling sectors across the board.

Prime Minister Adolphe Muzito addressed more than 100 business leaders at a special meeting during which the country's business federation FEC complained of "unjustifiable poverty" and "persistent problems" throughout the resource-rich country.

"We are going to reconsider our position," Muzito told the room, packed with business leaders and journalists on Monday, but said he could not make a decision on the spot.

Mining ventures owned by Freeport McMoRan, First Quantum, ENRC and several others have been paying millions of dollars to cover the new $60 per tonne tax, introduced in April on unfinished copper and cobalt to encourage miners to add value to Congo's resources in-country and export finished products.

Mining companies complained that many in the market require semi-finished products rather than finished products, and that attempts to invest in Congo's value chain were hampered by a two-year mining contracts review as well as the world economic crisis.

Grievances at the meeting ranged from concerns over banking constraints and legal insecurity to gripes over cigarette smuggling and aviation safety. The crowd regularly applauded complaints aired before a clutch of government ministers.

A memorandum from FEC president Albert Yuma to the prime minister, dated July 23 and seen by Reuters, cited "exorbitant" taxes on everything from air tickets to containers.

It said 84 percent of an air ticket from Kinshasa to nearby Brazzaville, the other Congo's capital, was spent on taxes, leaving just $29 of a $178 ticket price as company revenue.