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Yaoundé - 29 May 2020 -
Economy

Covid-19: Gicam suggests 18 fiscal and financial measures to support businesses

Covid-19: Gicam suggests 18 fiscal and financial measures to support businesses
  • Comments   -   Wednesday, 01 April 2020 10:28

(Business in Cameroon) - At the end of the extraordinary Board meeting held on March 19, 2020, in Douala, the Inter-Patronal Grouping of Cameroon (Gicam) promised to make proposals to the government regarding “the elaboration of new policies to support businesses and households.”

On March 31, it kept its promise by suggesting a set of 18 measures to be implemented to help companies efficiently deal with the Coronavirus health crisis. These measures concern fiscal and customs policies, internal debt payment, financial and monetary policies, and companies’ social policy.

Gicam suggests six fiscal and social measures to be implemented by the government. First, the grouping requests the postponement, without penalties, of tax and statistical reporting deadlines and the relaxation of conditions for the obtention of tax clearance certificates. Also, the government is asked to delay the collection of corporate and personal income taxes (for salaried employees) and contributions to the National Employment Fund and Crédit foncier. For companies unable to pay employees’ salaries, the government is asked to postpone their contributions to the National Social Security Fund but maintain the concerned employees’ social coverage nevertheless.

In short, Gicam is asking for a break in the collection of some major corporate taxes to give those companies room to face the constraints brought by the health crisis.

According to the grouping, as far as customs policies are concerned, four government measures should enable companies to withstand the Covid-19 crisis. First is the “suppression, during the crisis period, of demurrage and parking charges created by customs clearance operations.

The second measure is the “simplification and adaptation of customs clearance and suppliers’ payment procedures to, notably, take the confinement ongoing in many originating countries into account because many foreign suppliers are now unable to perform some formalities.

Next is “the suspension of post-clearance controls” and finally, “the relaxation of control measures (14-day quarantine) for strategic sectors’ vessels and those transporting sensitive products (agricultural inputs, finished and semi-finished food products, pharmaceuticals)."

Let’s note that during their recent meeting with the Minister of Trade, operators in the flour milling industry indicated that the price of wheat flour could go up and there could even be a shortage of the product. The reason, they explained, was additional costs incurred by the 14-day extended parking of ships at the base buoy, which could be passed on to the final price of the flour raising the price at which it is sold to consumers. 

Creation of SMEs’ support fund

For the monetary and financial policies, Gicam suggests "the activation of monetary levers to supply the banking system with liquidity.

These levers include the facilitation of banks' access to the money market by lowering interest rates, an increase of refinancing ceilings and support to banks and financial institutions (so that they could grant loans to companies), the regulatory freeze of repayment schedules of loans and leasing to companies and individuals as well as the elimination of penalties and related additional costs.

Gicam also asks the government to “speed up the reimbursement of VAT credit and domestic debt” and “the creation of an SME and craftmanship’s supporting fund.”  

Let’s note that many of those suggestions are the same made, to member countries, by the BEAC’s monetary policy committee at the end of its first meeting for the 2020 fiscal year, on March 27.

Brice R. Mbodiam

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