The 2021 Draft Finance Bill for Cameroon has introduced measures to promote the digital economy.
Tax Incentives for Small Businesses
The State, in the past years have been putting in place tax incentives to support investments into small businesses. This year, they have gone for innovative startups in the information technology and communication sectors.
The 2021 Draft Finance Bill has provided for tax incentives on research and development for startups. This is in order to create an environment that will encourage and develop technology businesses to open within the country. It will also serve as a boost in the mood, confidence and activities needed to organize this very young and important sector of the economy.
Read Also: Tax Incentive to Fight Youth Unemployment in Cameroon
The proposed 2021 Draft Finance Bill states that innovative startups in the information technology and communication domain will be grouped under Specialized Management Centers where they will be groomed and benefit from some tax incentives.
2021 Draft Finance Bill for Innovative Startups
Some of the incentives provided in the 2021 Draft Finance Bill include:
Get Ready for Digital Technology Centers in Cameroon. The 2021 Draft Finance Bill for Cameroon has introduced measures to promote the digital economy.
Tax Incentives for Small Businesses
The State, in the past years have been putting in place tax incentives to support investments into small businesses. This year, they have gone for innovative startups in the information technology and communication sectors.
The 2021 Draft Finance Bill has provided for tax incentives on research and development for startups. This is in order to create an environment that will encourage and develop technology businesses to open within the country. It will also serve as a boost in the mood, confidence and activities needed to organize this very young and important sector of the economy.
Read Also: Tax Incentive to Fight Youth Unemployment in Cameroon
The proposed law states that innovative startups in the information technology and communication domain will be grouped under Specialized Management Centers where they will be groomed and benefit from some tax incentives.
2021 Draft Finance Bill for Innovative Startups
Some of the incentives provided in the 2021 Draft Finance Bill include:
1. The exemption from all taxes and fees except social insurance and other social contributions for innovative startups in the information technology and communication sector. This will happen in the incubation phase which should not exceed five years;
2. After the incubation phase of the startup, three things may happen:
– If the startup is ceded, a 10% reduced tax rate will be applied on the added value (profit) after cession;
– In case it enters the second phase (operating stage), the business will benefit from the following in five years:
– Exemption from business license
– Exemption from registration rights on deeds of creation, extension or increase of capital
– Exemption from all tax and employer charges on employees salary except social insurance and other social contributions
– A reduce company tax rate of 15%;
– A reduction of 50% on the calculation of advance tax paid and the minimum corporate tax rate. The minimum tax rate in Cameroon is 2% plus 10% additional council tax (2.2%) on turnover of the fiscal year. The fiscal year in Cameroon starts from January 1 to December 31;
– An income tax credit of 30% for startups with expenditure on research and innovation. The ceiling level of such expenditure is put at 100 million
– After the 5th year, the common tax rate will be applied
3. Startups to benefit from these advantages will need to be approved by Specialized Management Centers put in place for startups.
4. The obligations of these Specialized Management Centers for Startups have been specified in a text by the Minister of Finance.
Read Also: Tax Incentives for Economic Disaster Zones in Cameroon
There are other changes to be expected in the 2021 Finance Bill in favor of small businesses and startups. In my next post, I will share with you expected measures to be put in place to promote the agricultural and agro-transformation sector.
Are you looking for a simple way to keep track of your business income? Our partners, FastTrack Excel, have designed Excel worksheets which you can download for free and used to track your business and personal income and expenses.
Read Also: Tax Incentives for Economic Disaster Zones in Cameroon
There are other changes to be expected in the 2021 Finance Bill in favor of small businesses and startups. In my next post, I will share with you expected measures to be put in place to promote the agricultural and agro-transformation sector.
Are you looking for a simple way to keep track of your business income? Our partners, FastTrack Excel, have designed Excel worksheets which you can download for free and used to track your business and personal income and expenses.
Discover more from OpenHub Digital
Subscribe to get the latest posts sent to your email.