Cameroon reactivates its plan to eliminate tax exemptions

On July 5, the Cameroonian Minister of Finance, Louis Paul Motaze, again expressed the government’s desire to abolish exemption taxes on imported consumer products, such as rice, fish and wheat, during the Orientation Debate Budget (BOD).

“For the government, among other things, it will try to carry out a systematic review of all existing tax expenditures, with the aim of eliminating tax exemptions that are ineffective or irrelevant with respect to the evolution of public policies,” said the Minister of Finance . “For example, the follow-up to the import substitution policy desired by the government requires that now the exemptions be reduced for certain products that affect the trade balance and are targeted within the framework of this policy, such as rice, fish and meat. wheat”. It indicates that, with these measures, it is intended to promote the local competitiveness of these goods on a larger scale.

Similar measures had been proposed previously. In 2019, the Cameroonian government made public its desire for the gradual reintroduction of customs duties on duty-exempt products, in exchange for allocating part of the subsequent revenue to local development funds for these sectors. However, these announcements ultimately failed to come to fruition in the 2020 finance law.

At the moment, indicates the Ministry of Finance, tax exemptions on wheat cause the State to lose about 15 billion FCFA per year. The taxation of rice and fish at a reduced rate of the Common External Tariff (5% compared to the normal rate of 20%) generates deficits of almost 28,000 million and 16,000 million FCFA per year, respectively.