The Cameroonian Head of State has decided to put an end to the controversy over the collection of taxes on imported phones. To this end, he has ordered the suspension of the process, through the Secretary General of the Presidency of the Republic (SGPR). The latter sent a letter to the secretary general of the Prime Minister’s services to inform the government of the presidential decision.
“In execution of the very high instructions of the President of the Republic, I have the honor to inform you that he asks the Prime Minister, head of government, to postpone the implementation of the digital collection of customs duties and taxes on imported telephones and terminals; submit to its high sanction a more appropriate mechanism for collecting said customs duties and other taxes, ”wrote Ferdinand Ngoh Ngoh, SGPR.
Here Is What You Need To Know
- Under the controversial phone tax, customs clearance fee at 33% on imported mobile devices was proposed to be paid.
- By the new approach, the burden of paying customs clearance fees lies on the final user where there is a default by the importer.
- The new measure, which also makes customs clearance mandatory for all telephones coming into the country was expected to have officially taken effect on 15th October, 2020, but was delayed following outrage on social media platform Twitter, with protesters using the #EndPhoneTax.
“The telephone user has always paid the 33% tax. The Customs department has not created any new tax. The only issue is that we have changed the way the tax can now be paid. It’s now either physically (at points of entry into the country) or by electronic means…,” Guy Innocent Diffouo, a top Cameroonian Customs official had said in a press conference in Yaounde on October 12.
Cameroon phone taxes
Read also: All Digital Marketplaces In Kenya To Pay 1.5% Digital Service Tax Starting From 2021
New 19.25% Value-Added Tax (VAT) On Ecommerce Companies In Cameroon
Added to the wave of taxes is also a new 19.25% VAT introduced under Cameroon’s new finance law. According to the country’s Ministry of Finance (Minfi), goods and services sold on Cameroonian territory through e-commerce platforms, as well as related commissions, are now subjected to VAT.
The implication of this is that online businesses would now have to pay 19.25% VAT, added to the 33% corporate tax and other additional taxes they would have to pay if they were companies.
The central African nation is a buoyant market for mobile phones and other mobile devices. There are more than 23 million mobile subscriptions in the country, representing about 90% of the total population. However, while mobile subscription is high, only about 6 million people, representing about 23.1% of the population have access to the internet. The country’s Directorate General of Customs has also disclosed that about four million telephones are imported into the country every year.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer