Brief: It is time for you to take this import benefits for investments in disaster zones in Cameroon and start a business in Cameroon.
It’s said “you are as good as your word”! You may not know – your words hold and have more power than you may think. Not keeping to your words may bring down your integrity because they’re a reflection of who your are. Remember I promised in a previous post I will do a continuation of the provisions relating to customs duties in the 2020 Finance Law of Cameroon.
I thought I should do a separate write-up on this because it is a great opportunity for all those who want to invest at home. This is because there are many opportunities out there, especially the crisis zones where you can make use of the import benefits for investments in economic disaster areas.
Taking into consideration the tax law provision that gives a tax incentive to encourage investors to invest in disaster zones, the 2020 Finance Law has also made provision for import benefits for such businesses. This provision will benefit only those who are making new investments. You can take advantage of this tax incentive for economic disaster zones to start a business in Cameroon.
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Below are the import benefits for investments in economic disaster areas as provided by the 2020 Finance Law of Cameroon:
in economic disaster areas in Cameroon
According to this provision, during the installation stage of the new investment, your business would be exempted from customs duties and taxes on equipment and materials used for the project.
This means they will benefit from a direct removal of such equipment and materials destined to be used for the investment project. It is worthy to know that according to this provision, the installation phase is not supposed to be more than three years.
For the first seven years of operations, the business is given a 5% reduction in customs duty. It is also exempted from value-added tax on all imports of spare parts, equipment, raw materials and consumables that cannot be sourced locally.
However, this reduction and exemption excludes levies and other expenses that may be considered as service fee. This means any other expense that falls out of the sphere of customs duty and value-added tax are not taken into consideration.
After the first seven years of the operation phase, the business is also placed on a zero percent door tax for exports (export duty) of manufactured goods. This means all the goods manufactured for exports will not pay export duty.
Businesses that have suffered from damage due to the crisis in the NW & SW Regions and from Boko Haram insurgencies in the Far North Region will also be beneficiaries. The same exemptions above will be applicable for your business
In this case, if you are importing materials or equipment to rebuild a damaged or destroyed investment, you may be considered to benefit from the exemptions if you meet up with the conditions.
In addition to the above, old enterprises that want to make new investments will also enjoy the import benefits for investments in economic disaster areas. However, only the operations concerned are taken into consideration.
The concerned operations must be subject to a separate accounting. That notwithstanding, for your business to benefit from this, the proposed investment programme must be approved by the Customs Administration.
The Customs Administration will also need to verify if your provisional list of imports is related to your proposed investment.
It’s not going to be rosy for those who will not comply with the above. We all know some corrupt individuals will want to use this as a means to bring in equipment and materials that will not end in the economic disaster areas.
In this case, the 2020 Finance law has put in place penalties for non-compliance with the validated investment programmes:
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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.