Optimal Control Application to the Dynamics of Corporate Tax Revenues in the Democratic Republic of Congo (2000–2024)
DOI:
https://doi.org/10.30871/jaic.v10i2.11901Keywords:
Optimal Control, Tax Revenues, Pontraygin Maximum Principle, Computational EconomicsAbstract
The mobilization of tax revenues represents a critical challenge for the Democratic Republic of Congo (DRC), particularly during the transition from the Impot sur les Benefices et Profits (IBP) to a new Corporate Income Tax system in 2026. Historically, corporate taxes have been volatile due to economic fluctuations and administrative inefficiencies. We formulate a two-dimensional optimal control problem using Pontryagin’s Maximum Principle and logistic growth modeling to capture revenue saturation effects. The nonlinear boundary value problem is solved via an efficient forward-backward sweep algorithm with fourth-order Runge-Kutta discretization. Empirical calibration uses DRC tax data (2000-2024) estimated with Generalized Method of Moments. Our analysis reveals that an optimally controlled transition could increase cumulative revenue by 18-25% compared to passive policies. The new tax system shows higher growth potential (α_2 >α_1) and enforcement effectiveness (β_2 > β_1). Optimal enforcement involves gradual reallocation from IBP to the new system, with front-loaded IBP enforcement maximizing legacy system revenue. The study recommends phased enforcement reallocation, early investment in new system capacity, and saturation-aware revenue targets. These findings provide rigorous quantitative guidance for the 2026 tax reform implementation, highlighting the opportunity cost of non-strategic administration.
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Copyright (c) 2026 Pierre Raymond Bossale, Marcial Nguemfouo
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