DRC cut price

Report / Oct. 28, 2013

The Cut-Price Sale of DRC's Forests

On tax avoidance and illegal deals in the Democratic Republic of Congo.

Almost 15 million hectares of forest are currently allocated to industrial logging in the Democratic Republic of Congo (DRC), an area six times the size of Rwanda. Proponents of industrial logging in the DRC often assert that it has the potential to bring in much-needed tax revenue to DRC’s coffers. 

The Cut-Price Sale of DRC's Forests reveals, however, that in 2012 the vast majority of logging revenues in the DRC were lost to tax avoidance and other illegal financial arrangements . The findings show that the Treasury received only 10 per cent of its dues under Congolese law. This states that companies must pay USD$0.50 per hectare in Surface Tax as a condition of highly lucrative logging rights in one of the world’s largest and most precious rainforests.

The report reveals how a range of tax breaks and other illegal incentives offered by the Ministry of Forests, Nature Conservation and Tourism allow the logging industry to skirt Congo’s laws and deprive the Congolese people of the few economic benefits they are due in return for the felling of their forests.