An Order by the Minister of Finance indicates which individual or corporate body benefits from what exemptions for what period of time during the installation and real business phases. The text bolsters the April 18, 2013 law on private investment incentives in the country.  

The Minister of Finance has taken a giant step to materialise the April 18, 2013 law giving Cameroonians or foreign natural or legal persons, resident or not in Cameroon, conducting business therein or having shares in Cameroonian companies a wide-range of incentives through which they can develop their businesses for sustainable growth in the country. A Ministerial Order specifies which individual or corporate body benefits from what customs or fiscal exonerations for what period of time during the installation and real business phases.

During Installation

Newly registered enterprises are exonerated from registration fees of structures used exclusively for the business set up, fees to register the contract for equipment supply and construction of necessary structures to take off the investment programme, fees for registering the concession contract as well as exonerated from registration fees for the creation of the business or increase in its capital.

The enterprise is also exonerated from Value Added Tax (VAT) for service delivery to take off projects from a foreign country, exoneration from TVA on the importation of equipment for the investment programme as well as exoneration from some local taxes.

During Business Phase

The Ministerial Order sets criteria for enterprises to benefit from the exoneration. In Category A, all enterprises that engage an investment of five years or more with a business capital of less than or equal to FCFA 1 billion, create at least one employment in each of the FCFA 20 million invested, contributes to value addition of at least 30 per cent in its investment sector as well as use at least 20 per cent natural resources, excluding human labour, water and energy and telecommunications have a wide-range of benefits.

Such a company has 50 per cent taxes exemption for five years from fees related to loans and caution fee for five years as well as exempted from 50 per cent of taxes on property transfer, among others. They also have a five per cent reduction of customs dues on the importation of equipment, tools, spare parts and consumables that are not similar with those produced locally.

Category B concerns enterprises whose capital equals or surpasses FCFA one billion but does not go beyond FCFA five billion for a five or more years of investment.  If during real business, they can create at least one employment for every FCFA 20 million invested, undertake an activity whose annual exports is in the neighbourhood of 25 per cent of its business turnover and contributes to 25 per cent value addition in its area of activity, such companies would benefit 50 per cent tax exoneration for five years. The enterprise will also benefit from 25 per cent tax reduction on its industrial and commercial fallouts from the sixth to the tenth year. It will also have a five per cent reduction on customs duties for the importation of equipment, spare parts and other material needed for the company.

Meanwhile, Category C enterprises include those with business capital of FCFA five billion for a five-year investment. Should they meet up with conditions like those of the A and B categories, they would have their enterprise or turnover taxes reduced by 75 per cent for five years as well as exonerations from dues on loans for ten years. They would also have a five per cent reduction on customs dues on the importation of equipment and other relevant tools needed for the functioning of the enterprise.

Implications

The April 18, 2013 law and the accompanying texts of application, give incentives to investors to conquer the national market, especially in a country where natural resources are aplenty and political and social stability assured. Investors or potential ones have always complained of high and numerous taxes and other bottlenecks but with legal, administrative and fiscal evolutions, things could change.

Should investments sprout up in the country commensurate with the good laws in place, then, employment would no longer be a problem and wealth creation and socio-economic development would receive significant improvement.  With it, the situation where almost everybody waits on government for employment and curses the system when it is not forthcoming or worth the salt would be a thing of the past.