(Business in Cameroon) - The latest Global Tax Expenditures Transparency Index (GTETI) places Cameroon as the 5th country most tax transparent in Africa and the 25th worldwide.
The Organization for Economic Co-operation and Development (OECD) defines tax expenditures as special measures that differ from the benchmark tax system (SFR). According to the organization, they may lead to the government losing revenue, but mainly aim to promote specific economic actions among taxpayers or to provide support to certain social groups.
The GTETI published on October 9 by the Council on Economy Policies revealed that Cameroon achieved this position with an overall score of 57 out of 100. In detail, the country obtained 14.7/20 for the establishment of an institutional framework guaranteeing transparency and accountability, 12.2/20 for data on lost tax revenues and their evaluation, 11.6/20 for the quality of information on reporting methodology, 10/20 for the public availability of tax reports and 8.5/20 for the accuracy of information on target companies.
"The evaluation of tax expenditure and the publication of the related report are becoming institutionalized in Cameroon," said Finance Minister Louis Paul Motaze, in the 2021 Tax Expenditure Report, published as an appendix to the 2023 Finance Law. Article 7 of Law no. 2018/012 of July 11, 2018 on the financial regime of the State and other public entities requires the government to make a detailed presentation of the nature and budgetary cost of tax exemptions and waivers, which must form an appendix to the Finance Act, when adopting State budgets.
Tax expenditure in Cameroon amounted to CFA439.6 billion in 2021, equivalent to 1.7% of GDP. Compared with the FY2020, this amount is down by CFA12.7 billion, due in part to a revised methodology. However, the report lacks comprehensive information about the specific companies that benefited from these expenditures, leading to the below-average score on the criterion of accuracy of information on target companies.
According to the Global Tax Expenditure Transparency Index (GTETI), Cameroon ranks below Benin (1st in Africa and 8th globally), Niger, Tunisia, and Morocco in terms of transparency. Within the CEMAC region, Cameroon leads the way, surpassing Gabon, the Central African Republic, Chad, Congo, and Equatorial Guinea.