Today, I am going to write about the local tax system in Cameroon. To be more specific, we will duel on council taxes in Cameroon. You will see some of the taxes and fees that are collected by the local and regional bodies which you may not have known. Learn more about the local tax (fiscal) system in Cameroon.
In Cameroon, the law gives rights to local councils to collect taxes, royalties and levies for regional and local authorities. The local fiscal system applies to city councils, councils, sub-divisional councils, regions and other local or regional authority that may be put in place by the law.
The regional and local authorities shall be responsible for the management of the taxes, royalties and levies. The rates of such taxes or levies are fixed by the legislative body and should be compliant with the bracket provided for by the law.
Let’s take a glimpse at some local taxes in Cameroon. Let’s start with those collected by or on behalf of the councils:
Local Tax System
The business license tax is paid by all natural persons or corporate bodies, foreign or national, carrying out any economic, commercial or industrial activity within a council in Cameroon.
The basis of calculation is the previous year’s turnover or an estimated turnover for new businesses. The business license is valid for one year and expires on January 1. Renewal must be done before February 28 every year.
Learn more about the business license as a council tax in Cameroon. You can also checkout the business license penalty for carrying out prohibited or illegal activity. New businesses are exempted from paying the business license contribution in the first year of their operation.
The discharge tax is paid by those involved in commercial, agricultural, pastoral or industrial handicraft activity that has a turnover lower than XAF10 million. They fall under the flat rate tax system and are not liable to the business license, value-added tax and personal income tax.
The discharge tax, which is a withholding tax, is established by local and regional authorities who benefit from the proceeds of the tax. It is assessed and issued by the taxation services. It is paid quarterly to the council revenue office within fifteen (15) days following the end of the previous quarter.
Those liable for the liquor license are corporate bodies or natural persons engaged in the production, wholesale or retail of alcoholic and non-alcoholic drinks in Cameroon.
Exempted from the liquor license are, mineral and aerated water, flavored or not with non-alcoholic extracts and non-fermented fruit juice. However, the exemption is effective only if the point of sales is distinct from that selling taxable beverages.
Having the liquor license doesn’t exempt you from paying the business license or discharge tax. This is to say, having one of these license doesn’t mean you don’t need to have the other. Many people have had this confusion.
The liquor license is personal and paid annually with the same rules that apply to the business license. It is assessed on the basis of turnover.
Property tax is an annual tax levied on natural and legal persons who own built-on and non-built property within the borders of Cameroon. It is determined by the value of lands and buildings declared by the owner.
The property tax is filed and paid at the tax center where the property is located. It has been fixed at 0.1% and an additional council tax of 10% of principal on built-on and non-built-on property. Checkout this previous post to get the rate and how property tax is calculated.
Stamp duties are levied on motor vehicles including two or three-wheeled motorized vehicles. This duty is paid annually runs from January 1 to December 31. The motor vehicle stamp duty is collected by insurance companies when the taxpayer is subscribing for a civil liability insurance policy.
The amount collected is paid to the office of the revenue collector on or before the 15th of each month following the month that it was paid.
Forest royalties are paid to district councils where the forest is located. The forestry royalty is an annual levy and is assessed on the basis of the forest area covered by a logging license. This also includes standing volumes at sites that have been assigned for development projects.
The forestry royalty is paid in three equal installments with March 15, June 15 and September 15 as the deadlines.
The proceeds of the royalty is shared 50-50 between the state and the council. The district council gets 50% (27%) of the 50% to councils, while the balance goes to FEICOM (Special Fund for Equipment and Inter-municipal Assistance) and support to recovery.
Stamp duty on advertising is charged on all tangible or intangible medium used for displaying adverts. This includes posters, bill boards, leaflets and handbills, advertising hoardings, radio, press, television, cinema and vans with loudspeakers. Check out this post on stamp duty on print advertising and how the councils collect the stamp duty.
The rates applied are as follows:
– 3% of the cost of advertising for each media (locally printed or imported);
– XAF30,000frs per month, per vehicle with a loudspeaker
– XAF20,000 per month, per vehicles without loudspeakers
The tourist tax is levied based on the overnight stay in classified or non-classified accommodations. It’s paid by the accommodated person and collected by the facility. The collected amount is supposed to be paid monthly on or before the 15th day of the month following the month it was collected by the accommodation facility.
Accommodation facilities include hotels, inns, motels and furnished residences. The local council where the accommodation facility is benefits 20% of the tourist tax collected while 80% goes to the State.
Was this post helpful?
Don’t hesitate to share with others as well as drop a comment below.
You can get in touch with us using the various media below: