Brief: MINFI puts in place modalities to enforce the law to promote investment in economic disaster areas by offering a tax credit of 30% to businesses rehabilitating their production tools in these areas.
The Cameroon Minister of Finance signed on October 4, 2019 modalities to enforce the September 2, 2019 Prime Ministerial decree to promote investment in economic disaster zones.
This was found in a circular signed by the minister specifying the modalities to apply the fiscal dispositions of law n0 201/202 of December 11, 2018 of the 2019 Finance Law of Cameroon.
Modalities to benefit
This was found in a circular signed by the minister specifying the modalities to apply the fiscal dispositions of law n0 201/202 of December 11, 2018 of the 2019 Finance Law of Cameroon.
Three regions were recognized as economic disaster areas by the Prime Minister – the Far North, Northwest and Southwest Regions.
The recently signed ministerial circular has specified the conditions of eligibility for new investments to benefit. According to the circular, two criteria have been put in place for those who intend to take the tax advantages by investing in these zones.
- Your business must create at least ten (10) direct employment opportunities and
- Must use raw materials produced in the specific areas
The 2019 Finance Law provided that the business must use at 80% of raw materials from the locality to benefit from the tax advantage.
However, this circular has canceled out that limit. It now suffices for the company to use raw materials from the zone concerned without any limits put in place.
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Tax credit to companies
The circular also gives a tax credit advantage to businesses that want to restructure or renew their machinery or tools used for production. Such investors benefit from a 30% tax credit on declared expenses.
For a business to be eligible for this tax credit, it has to be located in one of the economic disaster areas. It should be noted that the expenses that will be taken into consideration are those that are directly involved in the rehabilitation of the production tool.
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The tools or material involved should only be those that are directly related in the normal production process of the said business.
Other laws were also touched in the circular. This include company tax, personal income tax, VAT, excise duties, stamp duty and many others.
The enforcement of this circular begins on January 1, 2019.
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