25 January 2019 Cameroon enacts 2019 Finance Law Cameroon’s National Assembly enacted, on 11 December 2018, Law No.2018/022 (the 2019 Finance Law). The 2019 Finance Law covers direct and indirect taxes, tax procedure and tax controversy. The provisions of the 2019 Finance Law are applicable as from 1 January 2019. This Alert summarizes the key provisions of the 2019 Finance Law. Detailed discussionDirect taxes- Local purchase of petroleum products by marketers registered with the Large Taxpayers’ Unit have been exempted from the advance payment of tax (withheld at source) which generally applies to purchases made by companies from industrialists, farmers, importers, wholesalers, loggers.
- Reduction of the withholding tax due on capital gains earned on the disposal of real property from 10% to 5%.
- Introduction of the obligation for investors to use raw materials produced in an economic disaster area in order to benefit from tax incentives granted for the rehabilitation of the said area.
- Introduction of a tax credit of 30% for enterprises that invest in the reconstruction of their production facilities in an economic disaster area. The tax credit is capped at FCFA100 million and chargeable to taxable income for the three years following the year of investment, by taxpayers approved by the tax authorities.
- Introduction of a super reduced rate of Special Income Tax (SIT) of 2% applicable on remunerations paid by Cameroonian shipping companies to foreign companies for vessel rentals and charter, space rentals in foreign vessels, as well as commissions paid to foreign port agents.
Indirect taxes- Inclusion of life insurance and health insurance contracts and commissions, as well as local wood processing operations in transactions subject to Value Added Tax (VAT).
- General reform of the excise duty regime.
Tax procedures- Institution of an obligation, subject to penalty, for any natural or legal person regularly committed to the audit of the accounts or to the tax review of a public or private entity, to communicate the report of its work to the tax administration.
- Increase in the time allowed for the taxpayer to pay its debt following a notification of an assessment notice. This period has been increased from 15 to 30 days.
- Transfer of funds abroad by taxpayers carrying out business activities in Cameroon are subject to the presentation of a valid non-debt clearance certificate.
Tax controversy- Increase in the amount of the deposits and guarantees required and tightening of the conditions for granting and validating a stay of payment:
- Taxpayers who request a stay of payment must not have any tax arrears other than those disputed and must not be the subject of criminal prosecution for tax evasion.
- Taxpayers must now provide proof of payment of an additional 35% of disputed taxes instead of 10% as in the past, in order to benefit from the stay of payment before the administrative judge. Furthermore, the submission of a request of stay of payment in support of a challenged claim, following the decision rendered at first instance by the administrative judge, shall only be admissible after payment of 50% of the amount of disputed taxes and consignment of 50% of the remaining portion.
For additional information with respect to this Alert, please contact the following: - Joseph Pagop Noupoué | joseph.pagop.noupoue@cm.ey.com
- Ferdinand Nji Tanji | ferdinand.nji@cm.ey.com
- Marius Leivestad | marius.leivestad@za.ey.com
- Rendani Neluvhalani | rendani.mabel.neluvhalani@uk.ey.com
- Byron Thomas | bthomas4@uk.ey.com
- Dele A. Olaogun | dele.olaogun@ey.com
Document ID: 2019-5121 |
