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Cameroon plans to raise log export duties to 60% to stimulate local processing

Cameroon plans to raise log export duties to 60% to stimulate local processing
  • Comments   -   Tuesday, 22 November 2022 14:08

(Business in Cameroon) - The Cameroonian government plans to tighten export duties on logs in an attempt to boost the local processing sector.  “The export duty applicable to logs is set at 60% of the FOB (Free On Board, ed) value of the species. This rate also applies to the entry of logs into industrial free points," the 2023 finance draft law states.

The validation of this draft law by MPs will make the rate go from 35% in 2021 to 50% in 2022, and finally to 60% in 2023. The move is aimed at discouraging exports of unprocessed wood and bolstering the development of local processing. “The exit rate applicable to worked and semi-worked wood (...) is 15% of the FOB value of the species. Worked and semi-worked timber exported from industrial free points are not subject to the said levy," the document pointed out. This means that loggers who export raw logs will pay a higher tax than those who perform the first processing before shipping the finished or semi-finished product. For operators at the industrial free points, exports of processed wood should be completely free, according to the government's proposal.

Ban on exports

With this new approach, the Cameroonian government is pursuing its pro-local processing policy. Since 2022, the importation into Cameroon of machinery, equipment, and tools for advanced wood processing is exempted from all customs duties and taxes, in line with the decision of Cemac authorities to ban all log exports from the community. The decision was supposed to enter into effect on January 1, 2022, but was finally postponed to January 1, 2023, to allow countries to adjust to the new situation.

"All the texts have been adopted, except for one, which is the guideline on the timber industry (ban on log export, ed). There is a huge fiscal cost (...) given the current context, and I think it is right to postpone the decision to a later date,” explained the President of the CEMAC Commission, Gabonese Daniel Ona Ondo, at the end of the 38th ordinary session of the Council of Ministers of the Economic and Monetary Union of Central Africa (UEAC). This was on October 28, 2022, in Yaoundé. According to him, the implementation of this measure should, for example, make the Cameroonian government lose about CFA80 billion. "When this decision was implemented, Gabon lost CFA75 billion. Accompanying measures are needed," he said.

Brice R. Mbodiam

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