Tax evaders may end up paying more taxes
Many people have been asking me about the discharge tax system. They say I have not been covering it well in my write-ups. Below is an encounter with one ambulant
I went to buy a bulb for my toilet in one of this ambulant shops you find around cross-roads in Douala. I call them shops-on-wheels (hand-carts). They are makeshift shops on two-wheeled carriers commonly called ‘trucks’ or ‘pousse-pousse’ in Cameroon.
However, these shops may be mobile but the owners are not ambulant vendors. The ones that are ambulant usually move around at night while these carry out their activities on a fixed location. At night, they then push their trucks to filling stations or nearby secured places where they’re kept for security.
Temporary public highway occupation fees
One of the reasons they carry their wares in a pousse-pousse is that they can’t afford a fixed location. In this case, they don’t pay rent for the space except the temporary public highway occupation fees imposed by local councils on businesses occupying places closer to the road.
Secondly, they know very well that the place they use as business premises is against the law. This means they can be driven and their wares seized at any time by council or administrative officials. In this case, with their hand-carts, they can easily run away from the authorities in case there is a tax drive or forced evacuation.
Just two days ago, I saw owners of such businesses crying over TV because the governor himself supervised their forced evacuation. Some of them saw their goods destroyed and some carried away. This is not the first time they are doing this. They will go, but in less than no time, you will find them again around the streets.
This time around, I heard one of the victims say that they just paid their yearly subscription fees to the council a few weeks ago. It’s funny that councils collect money from these informal business owners for carrying out such activities in unauthorized areas.
The yearly subscription fees is the temporary public highway occupation fees I mentioned above. This fee falls under the council levies and is voted by municipal councils for their budget. It may vary from one council area to another.
The handyman or maçon
Going back to my bulb issue, I have always bought my electricity and plumbing materials from this guy. The economy is hard, so I personally repair some of my electrical and plumbing appliances. Many think home repairs are things they cannot try by themselves but need the help of an expert.
The fun is that most of these so-called ‘experts’ are not really experts. They just learned like I am doing. Carrying out some of your own fixes can save you a lot of money. I always check on DIY Network for easy how-to posts when I have a repair work to do at home.
I also follow some DIY videos on YouTube to solve some of my repair problems. However, you should be sure of yourself especially when it comes to electrical maintenance. If you are not sure you can handle it, get a qualified technician. You can find them all over town. You can also get them online in Cameroon at Technicien Freelance.
The discharge tax system
So this ambulant shop owner was complaining to me about the council tax collectors. He told me each time they come around, he had to pay at least 5000frs. This, he said was on a monthly basis. I asked him why he is paying on a monthly basis given that under normal circumstances, his business should fall under the discharge tax system.
The discharge tax is paid quarterly, even though the taxpayer may decide to pay for more than one quarter. He told me he’s not registered and pays only the temporary public highway occupation fees. This means he is actually running an unregistered business.
It’s funny how some business owners in Cameroon endorse illegality thinking that it will help them pay less tax. Many don’t know that giving bribes to tax officials doesn’t help them nor the government. It ends up in the pockets of someone who already earns a salary for that job.
As for the ambulant street vendor, he spends at least 60,000FCFA as bribe on yearly. This is in consideration that he has to pay 5000FCFA bribe every month. Let’s not even talk about the risk of his wares that may be destroyed by the authorities any time.
His business may be classified under Category A or B of the discharge tax system. The discharged tax is assessed and issued by the taxation services even though it is established by the regional and local authorities who benefit from the proceeds.
Ambulant traders are liable to category A or B. This category comprises producers, traders and service providers that have an annual turn-over of less than 2.5M & less than 5M respectively.
This means they pay a discharge tax that falls between 0FCFA to 40,000FCFA and is paid quarterly – that is, 15 days before the end of each quarter. Because you are running away from paying your taxes, you may end up paying thrice as much as what you are to pay.
Discharge tax categories and tax to be paid
Below is the discharge tax to be paid per category and the different turnovers per category:
Turnover: 0FCFA – less than 2,500,000FCFA
Tax: 0FCFA – 20,000FCFA
Turnover: 2,500,000FCFA – less than 5,000,000FCFA
Tax: 20,001FCFA – 40,000FCFA
Turnover: 5,000,000FCFA – less than 7,500,000FCFA
Tax: 40,001FCFA – 50,000FCFA
Turnover: 7,500,000FCFA – less than 10,000,000FCFA
Tax: 50,001FCFA – 100,000FCFA
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This content has been prepared for information purposes only. It is not intended to provide, and should not be relied on for, tax, accounting or legal advice. You need to consult your own tax, accounting or legal advisors before engaging in any transaction.