The tax law in Cameroon makes provision for targeted tax incentives for disaster zones in the country. This special tax relief is to encourage businesses to invest in such zones. This will also help in post-disaster revitalization of the mentioned zones.
In this regard, the Prime Minister of Cameroon, Dion Ngute, signed a decree declaring certain zones as disaster areas. This includes the Far North, North West and South West Regions of Cameroon.
The Far North Region of Cameroon is still suffering from invasions from Boko Haram in the northern parts of Cameroon. Meanwhile the Anglophone crisis which the government has always insisted is under control is worsening on a daily basis.
The decree was signed in conformity with Section 121 and 121 (a) of the General Tax Code of Cameroon.
By disaster zones, we are talking of areas that economic activities have been halted or slowed down due to certain happenings. Such causes include:
It should be noted that disaster zones or areas in Cameroon are to be specified by regulation.
Taxes & Duties To Be Exempted
The government of Cameroon has put in place the type of tax incentives that companies get from investing in economic disaster zones. Below are some of the exemptions from taxes and duties:
Businesses are exempted for this on condition that the installation phase of the new investment should not go above 3 years.
Read Also: Business License Tax Exoneration in Cameroon
Both Old & New Businesses
According to the law, businesses that carry out new investments in such areas are exempted from certain taxes and duties. This means it benefits both existing and new businesses.
In the case where new investments are carried out by old companies, the exemptions will apply only on the profits and operations of the new investments. The company in such a case is obliged to carry out separate accounting for such operations.
That said, the tax authority must approve of the planned investments. When it is approved, they will issue a compulsory discharge at the end of each fiscal year for renewals. This is based on the actual implementation of the investment plan.
On the contrary, if the business is non-compliant with the approve investment plan, it will lose the tax incentives. It doesn’t just end there – the business will have to settle unpaid taxes and duties with no prejudice. This means they will not pay penalties due to late payments or interests.
Businesses Must Meet Up Specific requirements To Benefit From Exemptions
For you to benefit from the exemptions referred to above, your investment must meet up the below criteria:
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From these two requirements, you will understand that the government is doing this in a bit to step up employment and encourage the creation of transformation businesses.
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Image Credit: CNA
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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.