Key Updates to VAT and Excise Duty in Cameroon’s 2025 Finance Law

The 2025 Finance Law brings notable updates to Value-Added Tax (VAT) and Excise Duty, particularly focusing on exemptions and scope adjustments. Here’s a comparison with the 2024 General Tax Code, highlighting the key changes, benefits, and challenges.

---

1. VAT Exemptions for Essential Goods

2025 Finance Law Updates

• Section 128 introduces an exemption for essential goods listed in Annex 1, maintaining its focus on affordability for basic necessities.
• The rest of the provisions remain unchanged.

Comparison with 2024 General Tax Code

• The 2024 General Tax Code already exempted essential goods and basic foodstuffs from VAT, particularly items sold directly by farmers, livestock breeders, and fishermen​Law on Local Taxation​Law on Local Taxation.
• The 2025 law clarifies and expands the implementation of these exemptions, ensuring they are automatically applied without prior issuance of exemption certificates​Law on Local Taxation.

---

2. Excise Duty Exemptions

2025 Finance Law Updates

Section 131a of the Finance Law exempts:

1. Inputs of products subject to excise duty, provided they are purchased by local production enterprises that themselves are subject to excise duty.
2. Electrically powered vehicles and motorbikes, under specified tariff subheadings, to encourage environmentally friendly transportation options.

Comparison with 2024 General Tax Code

• The 2024 General Tax Code only exempted certain inputs used in specific industries, without targeting environmentally friendly vehicles​Law on Local Taxation.
• The 2025 updates explicitly support green energy initiatives by exempting electric vehicles and motorbikes​Law on Local Taxation.

---

3. Benefits of the Updates

For VAT Exemptions:

• Affordability: Expanded VAT exemptions for essential goods lower the cost of basic necessities for households.
• Streamlined Compliance: Automatic application of exemptions reduces administrative hurdles for businesses.

For Excise Duty Exemptions:

• Support for Local Production: Exempting inputs used by local enterprises boosts competitiveness and reduces production costs.
• Environmental Incentives: Exemptions for electric vehicles promote the adoption of cleaner technologies and align with global sustainability goals.

---

4. Challenges of the Updates

1. Administrative Complexity: Applying exemptions, particularly for electric vehicles and specific inputs, requires clear regulations and monitoring mechanisms.
2. Potential for Misuse: Without proper oversight, exemptions could be exploited by entities not qualifying for the benefits.
3. Implementation Delays: Businesses may face delays in accessing exemptions due to gaps in regulatory frameworks.

---

5. Practical Examples

Example 1: Electric Vehicle Importer An importer bringing in electric motorbikes under tariff subheading 8711.60.00.000 benefits from a complete excise duty exemption, reducing the final cost for consumers.

Example 2: Local Beverage Producer A beverage producer purchases inputs for production. Under the 2025 provisions, these inputs are exempt from excise duty, lowering production costs and enabling competitive pricing.

---

6. Read Also

• Key Updates in the 2025 Finance Law for Professional Income and Road Transport Operators
• Real Estate Income Tax in Cameroon: Key Updates in the 2025 Finance Law

---

7. Get Help Navigating These Changes

OpenHub Consulting offers tailored Small Business Tax Management Services to help you stay compliant and leverage tax incentives. Learn more here.

---

Stay Updated

Download the 2024 General Tax Code of Cameroon for reference here and keep track of the latest updates.

Got questions or need help with VAT or excise duty compliance? Leave a comment or contact us for tailored advice!