Taxes are part of running a business, but they don’t have to be complicated. The 2025 Finance Law introduced changes to some personal income tax rates for some income types. If you’re a small business owner or investor, here’s a simple guide to what’s new and how it impacts you.
1. Flat Tax Rates for Non-Commercial Income
Some types of income are now taxed at flat rates, making it easier to calculate your tax.
What’s New:
- 10% flat rate: This applies to non-commercial income like:
- Payments for board memberships (Section 56(2)d)
- Sportsmen or artists’ income (Section 56(2)f)
- Service payments (Section 56(2)e)
- 5% flat rate: This lower rate applies to income earned from digital platforms (Section 56(2)g).
Example: Imagine you’re an artist earning 1,000,000 CFA francs for a painting commission. Your tax will be 10%, or 100,000 CFA francs. If you’re earning through a digital platform, it’s just 5%, or 50,000 CFA francs.
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2. Tax on Stocks and Shares
If you earn money from dividends or stock investments, here’s what the new personal income tax rates apply:
- 15% flat rate: Most taxable income from stocks and shares falls under this.
- 10% reduced rate: This is for dividends distributed by companies with a turnover of 3 billion CFA francs or less.
- 30% increased rate: This applies if the income is earned in a tax haven (countries or territories with low or no income tax).
Example: You hold shares in a small Cameroonian company earning 2 billion CFA francs annually. If the company distributes 1,000,000 CFA francs as dividends, your tax will be 10%, or 100,000 CFA francs.
Need Help? For small businesses managing investments, our Accounting Services can keep your books in order. Learn more here.
3. Changes for Passive Income and Property
Passive income, like rent from property, also faces updated rates:
- 30% rate: Applies to any passive income earned in tax havens.
- Standard rate: For all other cases, depending on income type.
Example: If you’re renting out property in Cameroon, you’ll pay the standard rate unless you’re dealing with earnings tied to a tax haven.
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Why These Changes Matter
- Easier to Calculate: Flat rates simplify tax calculations for individuals and small businesses.
- Encourages Digital Growth: Lower rates for digital platform earnings aim to boost online businesses.
- Transparency in Investments: Clearer rates help manage income from shares and stocks.
Take Action
Taxes don’t have to be stressful. Here’s what you can do today:
- Track Income Sources: Use tools like Kola Business Manager or Excel to stay organized.
- Get Professional Advice: Our Small Business Tax Management Services can handle the details for you. Learn more here.
- Educate Yourself: Download the 2024 General Tax Code of Cameroon for reference here.
Have questions about these tax changes? Leave a comment below or contact us for personalized support. Let’s make taxes simpler together!
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