The agony of doing business in Congo

The World Bank's report on where it is easiest to start a business put the Congo at No. 175. A system that requires businessmen to pay well above their profit in taxes makes honest dealings cost prohibitive.

The World Bank put out its year "Doing Business" report where it reports on how easy it is to start and operate a business around the world.

First, the good news. The DR Congo moved up four places to No. 175 out of 183. Break out the champagne. Seriously, though, the government was congratulated for having made improvements in the ease of registering property and starting a business. They even won the prize for the most improvements in obtaining construction permits.

Now for the bad news. Seriously – 175th? That's pretty terrible. Let's see how easy it is to make a profit in the Congo. If you pay all of your taxes, you will be paying 340 percent of your profits in taxes, a process that will take you 8 full weeks (working 40 hours/week) to do. In other words, nobody can even come to making a profit if you want to be legal – the government has institutionalized tax fraud.

Other factoids are: In order to enforce a contract through the law, it will take you an average of almost two years and cost you 1.5 times the amount of the claim.

Pretty atrocious. The government has made some improvements, this is true, over the past years. But apparently it's been a drop in the bucket.

Jason Stearns blogs at Congo Siasa.

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