(Business in Cameroon) – Cameroonian Finance Minister Louis Paul Motazé recently presented a bill on local taxation to the National Assembly, aiming to provide significant financial resources to the country’s municipalities. “The new sources of funding identified will help increase the municipalities’ resources by CFA126.4 billion,” he explained.
This amount is intended to supplement the resources already collected by the tax authorities for the country’s decentralized local authorities (CTDs), which amounted to CFA261 billion in 2023, representing 7.3% of the state’s own resources. “The goal of the bill is to double this amount, bringing it to at least 16% of the state’s own resources,” Motazé added.
To achieve this, the proposed bill includes several reforms. One key reform is the introduction of a simplified general tax (IGS) for businesses with annual revenue below CFA50 million. According to Minister Motazé, this tax will replace the current lump-sum tax and simplified tax regime, and it is expected to generate an additional CFA50 billion per year.
The bill also proposes the extension of municipal surcharges to excise duties, special income tax, and registration fees for public contracts. This measure is expected to provide CTDs with an additional CFA43 billion annually. Furthermore, the reform includes an increase in the special excise duty rate from 0.5% to 1% to help fund waste collection and treatment, which is expected to generate CFA20 billion more.
“This ambitious reform is, above all, a commitment to modernize the local tax administration, making it more effective and better connected to the realities of our CTDs,” the Finance Minister stated. To ensure the quick and effective allocation of resources to the CTDs, the government plans adjustments in the management of the Treasury Single Account. These include providing each CTD revenue collector with a bank identification linked to the Treasury Single Account at the Bank of Central African States (BEAC). This system will allow each unit to manage its own expenses autonomously and mobilize local tax resources, subject to the approval of the central Treasury accountant.
