Brief: Fighting youth unemployment in Cameroon using tax policies. From 12.8% in 1998 to 5.81% in 2018, the youth unemployment rate in Cameroon has seen a steady but drastic fall.
According to the International Labor Organization, the youth unemployment rate in Cameroon was at 5.76% in 2018.[Source(s): Statista / ILO]. The statistics show that within 26-year period, 1998 witnessed the highest with 12.8% with the lowest figure, 4.40% in 2007.
Youth unemployment is that share of the labor force with ages 15-24 who have no jobs but seeking and ready to work. It should be noted population of Cameroon is largely made up of youths with more than 60% under the age of 25 [Source: CIA].
In order to improve the employment of youths in the country, the government have put in place some specific measures. One of such measures is the implementation of tax incentives to promote the creation of jobs by reducing the cost of labor.
In such a situation, businesses will demand for more labor since the cost is low. Cameroon has used this alternative to solve youth unemployment for a long time now, but many are unaware of its existence.
However, the successes of this policy choice is yet to be evaluated, or if done, I am still to fall on the information. So let’s checkout out Section 105 of the General tax Code of Cameroon says on tax incentives to promote youth employment.
According to Section 105, businesses are exempted from taxes and certain contributions on the salaries for their employees. However, the following criteria must be met before a company benefits from this tax incentive.
With the above conditions met, the taxpayer will benefit an exemption from all the taxes and contributions paid to these youths. However, this will exclude social security contributions like payments made to national social insurance fund, NSIA.
Not all taxpayers benefit from this tax incentive to fight youth unemployment in Cameroon. The fact that you fall under the actual earnings tax system doesn’t mean you will benefit from the tax incentive.
Taxpayers that are already benefiting from other tax dispensation or any special tax incentive system are excluded from this. If you want to invest in Cameroon, you can take advantage of this tax incentives for those who invest in economic disaster zones.
This tax incentive to promote youth employment will be valid for a three year period. This can be increased to five years if the recruitment is taking place in what policy makers term “economically backward areas demarcated by regulation”.
For businesses to benefit from this, the following needs to be deposited at the tax office of the taxpayer:
This tax incentive was instituted in the 2016 Finance law and its application was started on January 1, 2016.
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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.