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Cameroon lacks consistency in fiscal policies (World Bank)

Cameroon lacks consistency in fiscal policies (World Bank)
  • Comments   -   Tuesday, 31 January 2023 14:34

(Business in Cameroon) - In its “Creating Markets in Cameroon: Country Private Sector Diagnostic” published last December, the World Bank points to the lack of consistency in fiscal policies in Cameroon.

Calling on the government to revise its business taxation, the institution said: “fiscal measures should be applied with better transparency and consistency. Fiscal pressure and how firms manage it through tax holidays create important distortions that seem to favor well-established companies while preventing fair competition. The lack of coherence behind tax policies is also suboptimal from a fiscal point of view.”

An analysis conducted by the Directorate General of Taxation of the Ministry of Finance, for example, shows that the cost of the many tax-derogatory measures contained in the 2013 law on incentives for private investment outweighs the benefit accruing in terms of fiscal revenue, the World Bank recalled. To address this mismatch, the Bretton Woods agency recommends that tax authorities take into account the impact of taxes on the most productive companies and evaluate the cost of incentives and the benefits generated. For, so far, the incentives granted to a hundred or so beneficiaries have not generated a significant number of jobs.

In terms of immediate measures, the Bank suggests that a cost-benefit analysis of the exemptions be done and a strategy to optimize taxation and eliminate the 2.2% levy on turnover be set up. In the mid-term, the tax code should be reviewed to gradually reduce and consolidate taxes, and reduce and then eliminate distortionary incentives.

S.A.

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