Draft budget:Cameroon Gov’t to raise taxes

For the past several years, government has systematically raised taxes, an approach which seems to be at odds with its much touted policies of poverty alleviation and incentives to investors

By Clovis Atatah

The already heavy tax burden on Cameroonians will get even heavier next year if the National Assembly goes along with government’s budget proposals.
Government is envisaging tax increases next year to make up for what it describes as an expected drop in oil revenue.
Although government did not directly refer to tax increases in the budget bill tabled at the National Assembly this week and the prime minister’s budget speech on Tuesday, the allusion to “broadening the tax” base is a euphemism for higher taxes.

In some cases, such as non-salaried income brokers, new income taxes have been introduced. Other new taxes will affect alcoholic beverages and mining companies.
The exemption on customs duty on fish, wheat and fish has been extended, but only by six months. For half of next year, these commodities will again be taxed like in the past years.

New and higher taxes are intended to help government attain its objective of raising non-oil revenue. In the 2008 budget, government targeted raising 1429 billion FCFA from non-oil sources. Next year, the target is 1535, an increase of 106 billion FCFA.
Since the so-called tax reforms were initiated about a decade ago, government has either introduced new taxes or raised old ones. However, the poll tax was abolished.
The Value Added Tax (VAT) is the most significant tax introduced by government in the last 10 years. The tax, charged on virtually all goods and services, has pushed prices upwards.
Initially, the VAT rate was 17 percent but government raised it to 18.7 percent two years ago.
With the “broadening of the tax base” in 2009, it is likely that prices of some goods and services will rise while some income-earning consumers will have less money in their pockets.