Brief: If you planned to invest in Cameroon, this is the right time. Take advantage of the tax incentive for economic disaster zones declared by the prime minister on Septembr 2, 2019.
For three ugly years, things have not been as it was in the two English speaking regions of Cameroon. For three painful years, people have been killed, human rights have been violated and businesses have been devastated.
Unfortunately, the civil unrest shows no signs of ending soon. Businesses are closing up or relocating from the regions on a daily basis. Businesses depend on customers, employees, partners, justice, peace and stability.
These regions are being deprived of these. The partners, employees and most of all customers are running away. They are taking a new identity – IDPs, internally displaced, runaways, refugees and what not.
What will you do if there is unrest where you are? Will you stop living, thinking, working, eating, etc? Whatever the case, life will not end. Life will still go on. New ways of doing things will pop-up.
I have been following this “Running a Startup in a Crisis Economy” series introduced by Otto Akama, an entrepreneur and founder of Makonjo Media. He is based in Buea, one of the towns where the crisis has dealt with.
It should be noted that Buea was and to me is still considered the tech capital of Cameroon. I am still to find another tech hub like Silicon Mountain, in Buea. Interesting things pop-up from this town even with the insecurity.
From the series, you could see that even with the crisis, businesses are still coming up. A new wave of crisis entrepreneurs have come up with new ideas determined by the situation they live with presently.
These entrepreneurs are playing a vital role in bringing live back in the affected regions. Even though many of them have closed their businesses and left, some are still determined even with groundnuts flying pass.
According to the World Bank, the number of poor people in Cameroon increased by 12% between 2007 and 2014. This increase was concentrated more in the northern regions that has up to 56% concentration of the poor.
The two English-speaking regions may soon be fighting with the northern regions for this position. This is the effect of the crisis that has turned the one-time industrious people of these regions to beggars.
That not withstanding, things might change if people take advantage of the tax incentive for economic disaster zones that was declared by the Prime Minister. Tax incentives are designed to encourage investments.
The PM declared the Far North, North West & South West regions of Cameroon as economic disaster zones. This means they will benefit from Section 121 and 121 (a) of the General Tax Code of Cameroon.
This tax incentive for economic disaster zones is meant for the rehabilitation of disaster zones by promoting new investments in the affected areas. Companies that invest in such zones are exempted from certain taxes and duties.
In my last post, I gave a review of the PM’s decree and a preview of Section 121 and 121 (a). Take a look at it to see the specific taxes, duties and the modalities to qualify for the exemptions.
When you are a victim of a civil unrest like what is going on in the NW & SW Regions, or Boko Haram atrocities in the Far North region, no amount of aid will be enough to relieve your pains.
It will take many years for these areas to fully recover from the various plagues. However, there all help is help and there’s no reason you should ignore any help you can get.
If you are an entrepreneur, an investor, it is time for you to take this advantage decreed by the Prime Minister. Many people, especially Anglophones are rarely aware of such tax incentives.
This is because most of the information are sent first in French and a rough translation in English. Even experts at times find it difficult to understand some of these laws because it’s just a word-for-word translation from French.
Government have two main methods to fund their projects. It can be by collecting tax and spending on projects or through tax expenditures. Tax incentives for economic disaster zones fall into the latter.
This take the form of tax credits, tax exemptions or rate reductions. It is usually used to take a particular action like this that encourages companies to invest in the disadvantaged regions.
One of the greatest advantage for tax incentives to government is that it is relatively easy to implement. This is because they don’t have to spend a lot to implement since they make use of information from tax centers.
As of now, we are still waiting for the government after its September 2 announcement to share with the public modalities on how to carry it out. This is the first time such a law is enforced in Cameroon.
Meanwhile as we ponder about this, I will be sharing with you in my next post some investment opportunities in the different regions affected. This will help or ignite some of you into taking this great advantage.
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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.