The 2015 Finance Law of Cameroon proposed a provision, that was added and went into operation on January 1, 2016 that was out to promote the employment of youths in the country. Section 105 (new) and 106 (new) of the General Tax Code of Cameroon gave a tax exemption and modalities of eligibility respectively to firms that employed young graduates of less than 35 years old for for their first-time job or pre-employment internship.

Such companies or sole-proprietorships are exempted from taxes and some contributions paid on behalf of young people employed. This excludes the social security contributions. Only firms that fall under the Actual Earnings Tax System are eligible for this exemptions.

Conditions for the tax exemption

• The recruited employees must be less than 35 years of age.  It must also be their first-time jobs or pre-employed internship

• Employment contract term shall be a fixed-term or open-ended contract

• Firms must fall under the actual earnings tax system.

• The firm in the actual tax regime must not be benefiting from any dispensation tax system. It must not also be under any special tax incentive system

• The exemption shall be valid for a period of three (3) years

• The validity can be extended to five (5) years in case the economic activity of the firm is taking place in an economically backward area.

Conditions for eligibility

Section 106 (new) of the General Tax Code of Cameroon states the conditions a firm can benefit from the tax advantage. Firms have to submit to the tax authority:

• The list of persons recruited, as well as valid supporting documents

• Tax return

Economically backward area

As defined by the Decree #000509 MINFI/DGI/RI/L of July 4, 2016, an economically backward area is one which maybe affected by natural disasters, landslide, famine, drought, insecurity and so on. Companies that are located in such zones as from January 1, 2016 are to benefit from the above exemption in the case where they recruit young Cameroonians of less than 35 years old and for their first employment.

Article 2 of the decree declares the Far North Region of Cameroon as a backward zone because of the insecurity. Other zones could be added in the case where an incident that causes difficulty in carrying out economic activities occurs, be it short term or long term.

It should be noted that the tax exemption can be repealed in the case where the said cause has stopped.

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