(Business in Cameroon) - To fight tax evasion and fraud, Cameroon will include fiscal measures aimed at discouraging cash transactions in its 2022 finance law, according to the circular signed on August 30, 2021, by President Paul Biya to issue guidelines for the 2022 general budget.
“Tax revenue mobilization should be pursued by broadening the tax base, securing revenue and revenue collection channels, and intensifying the fight against tax evasion and fraud. These measures should be concretized by "adopting fiscal measures aimed at streamlining cash transactions (...)" and by "continuing to improve collaboration between financial services,” the circular reads.
For the time being, there are not many details but it seems that Cameroon is following the example of its neighbor, Gabon, which introduced a 2% tax on the pre-tax value of cash withdrawals. This tax is applied on individual and legal persons’ cash withdrawals when the amounts exceed XAF5 million in any given month.
According to Gabon’s Minister of Economy, the tax was introduced to encourage actors to use traceable and digital payment means like bank wires, checks, payment cards, and mobile money because “cash transactions are difficult to trace and boost the informal economy.”
In Cameroon, the implementation of such a tax could be hindered by several factors. First, 90% of the country’s economy is based on the informal sector, as the employer’s grouping GICAM revealed. Also, the bancarization rate is 12% (the government’s 2020-2030 development strategy eyes an 80% bancarization rate), meaning most of the operators do not rely on banks and financial institutions for their transactions.