Discusses pricing formula and other fees, value-added tax (VAT), etc.

Transportation costs and government regulations affect the determination of prices in the DRC.  The lack of usable roads, limited barge and rail traffic, and the high cost of air transport add considerably to retail costs.  Prices at a particular location depend largely upon transportation links.  Price controls, although inconsistently enforced, can have significant impact because nearly all manufactured goods and many food items sold in the DRC are imported.

Pricing falls nominally under the control of the Ministry of Economy and an inter-ministerial consultative price commission.  The inter-ministerial consultative price commission is responsible for setting prices for electricity, water, transportation and fuel.  The regulations set a schedule of permissible profit margins expressed as a percentage of the selling price, varying according to the product.  The selling price of an imported product is calculated by adding the following to the purchase price (often the manufacturer’s “list price”) in the country of origin: (1) transportation; (2) import duties and fees; (3) breakage, insurance, taxes, and bank fees; and (4) storage (including cold storage when needed).  Wholesaler profit may be 10 to 20 percent of the selling price, while retailer profits range from 15 to 25 percent.  The Interior Market Police under the Ministry of Economy is in charge of verifying that sellers are complying with price regulations.  The DRC introduced a 16 percent Value Added Tax (VAT) on January 1, 2012.  The cost of transportation and multiple, often duplicative, taxes add a substantial amount to the price of imported goods.

When determining pricing the following points should be considered:

  • Taxes and fees paid to government and regional entities;
  • High and variable, transportation costs;
  • Limited purchasing power of the population;
  • Trends in the USD-CDF exchange rate;
  • Finished consumer goods and products tend to be imported; 
  • Other than water, power and fuel, whose prices are set by the GDRC, businesses may set their prices on products sold if these do not exceed the ceiling profit margin set by the price regulation.

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