WASHINGTON, USA, 31 July 2025-/African Media Agency (AMA)/- In the Democratic Republic of Congo (DRC), rationalizing tax incentives could improve effectiveness of tax policies, and pave the way for future tax rate reductions, while ensuring adequate resources for development and social spending, according to the World Bank DRC Economic Update, released today.
The report titled Reassessing Tax Incentives – Falling Short of Promised Growth and Equity notes the high GDP growth rate of 6.5% achieved in 2024, supported by dynamic mining activities, especially in copper and cobalt. Despite being among Africa’s highest, this growth rate is slightly below the 7.9% average from 2021-2023.
Even with this high growth, however, the report highlights that significant poverty reduction and job creation have not yet occurred. Macroeconomic stability has been maintained through fiscal discipline and avoiding monetary financing of deficits. Inflation, though still high, fell to 8.6% in June 2025. The DRC’s development potential remains substantial, with a positive economic outlook.
The report’s special topic section examines tax incentives, focusing on their evolution and impact. DRC’s tax revenues account for 12.5% of GDP, compared to the SSA average of 16%. According to the report, tax incentives lead to a revenue shortfall of about 5% of GDP—equivalent to one-third of total tax revenues or three times the health sector budget—and provide minimal benefits to vulnerable households.
“The DRC has strong economic potential. To achieve inclusive and sustainable growth, the country should boost domestic revenue, streamline tax incentives, and focus on social services and infrastructure investment,” said Albert Zeufack, World Bank Country Director for Angola, Burundi, the Democratic Republic of Congo (DRC), and Sao Tome and Principe.
To address challenges and boost resources for growth, the report recommends simplifying fiscal policy, harmonizing tax rates, replacing profit-based cost-based tax incentives, and improving transparency and evaluation of tax incentives.
Distributed by African Media Agency (AMA) on behalf of World Bank Group.
Contacts:
In Kinshasa: Marinette Kegbia, +243 982 992 290, mkegbia@worldbankgroup.org
In Washington: Daniella Van Leggelo Padilla, dvanleggelo@worldbank.org
Source : African Media Agency (AMA)
