This article highlights the important modifications brought about by the 2024 General Tax Code and summarizes the reintroduction and reformulation of Cameroon’s personal income tax declaration requirements. It highlights the government’s effort to improve individual taxpayer compliance by taking into account a range of income sources and utilizing online platforms to facilitate expedited filing procedures. Additionally, it emphasizes the overarching goal of obtaining money that has not been previously declared in order to increase tax receipts and regulatory openness throughout the nation.
Following the publication of the Finance Law for the fiscal year 2001, an initial reform was proposed mandating non-professional taxpayers to declare personal income tax. The requirement to register personal income was then reinstated by Law No. 2003/017 of December 2004, the Republic of Cameroon’s Finance Law. Article 74, which has been amended, now states that any taxpayer who is subject to personal income tax must provide a detailed declaration of the income they received in the previous tax year, on a form provided by the administration, to the tax center of the place of taxation by no later than March 5th of each year. After the declaration has been submitted, receipt is acknowledged. The aforementioned provision was designed to give the tax authorities the ability to access undiscovered personal income tax niches by casting a wide net.
Notwithstanding the regulatory efforts, this provision remains inactive and has stopped the implementation of income declarations over a 10-year period, due to implementation challenges and ineffective organization of the reform, as evidenced by the limited consolidation of income declarations over a ten-year period.
Twenty years later, the State of Cameroon through the law establishing the General Tax Code for the year 2024, has reintroduced the issue of the declaration of personal income. In fact, the Article 74, and Article 74(bis) 1, 2 and 3 have revived the obligation of annual declaration of personal income. The substance of these provisions reveals that as from the 2024 tax year, individual taxpayers who receive income from salaries, wages, pensions, life annuities, and/or financial and property income, as well as total compensation of all kinds, are now subject to this new tax obligation beginning of the 2024 tax year.
Under the provisions of the new General Tax Code, any citizen with a tax domicile in Cameroon, or who derives income from activities established in Cameroon, is obliged to complete, and submit a declaration of all income. This means, for example, that landlords are required to declare rental fees received from tenants; shareholders are required to declare dividends; and private sector employees are required to declare their monthly remuneration. This initiative by the State also and above all enables it to capture most of the revenue that escapes it, from shopkeepers, farmers, and other service providers in various fields.
The annual personal income tax return is filed directly online, using a form provided by the tax authorities on a dedicated platform, enabling taxpayers to easily enter the amount of remuneration received during the year, deductions at source and balances to be regularised. The aim here is to enable all taxpayers to participate in tax collection, by paying Personal Income Tax, which is levied on the earnings of all taxable individuals.
Given that this new obligation to declare income enables the tax authorities to broaden the tax base and to obtain precise information on taxpayers’ salaries and income, and on income-generating activities that are often unknown to the public but held by non-professionals and even salaried workers (in both the public and private sectors), failure to comply will result in a range of penalties. For instance, if a taxpayer fails to file an annual return, there will be late payment penalty of 10% for each month that the return is overdue, capped at 30%. Similarly, if a taxpayer fails to comply with a formal notice to file a tax return within the following 7 days, the tax will be assessed automatically and the tax will be increased by 100%. Finally, it should be noted that failure to file a tax return for any financial year will result in the taxpayer’s name being removed from the file of active taxpayers, making it impossible to manage and obtain a tax clearance certificate, a document that is required and useful in many respects.
To conclude, it can be said that by reactivating the concept and practice of annual income tax returns for individuals, the Cameroonian tax authorities have created a fifth tax regime: that of non-professional taxpayers, which consistent with the flat-rate tax regime, the tax regime for non-profit organisations, the simplified tax regime, and the actual tax regime. Initially, as per Article 74 bis of the General Tax Code, the deadline for filing this tax return was annually on 15 March. For this first year however, it was extended to 30 June 2024, a date which has been further extended by the authorities. Henceforth, the deadline will be strictly enforced on 1 September 2024, providing ample time for citizens to meet this obligation.
While it is acknowledged that this new legal requirement demonstrates a real desire on the part of the State to flush out and explore existing tax loopholes in order to broaden the tax base and, consequently, revenue, we can also think further ahead and see in this resurrected initiative a determination on the part of the public authorities to track down revenue of unknown and dubious origins, and a clear desire to raise and bring back into the open the issue of the declaration of property and assets, enshrined in Article 66 of the Constitution of the Republic.
Author: CLG Cameroon.
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