Cameroon Introduces Electronic Transfer Tax Of 0.2% In Proposed New Law

The Cameroonian government has proposed a 0.2 percent tax on money transfers in 2022 as part of the country’s proposed finance law. The 0.2 percent levy applies to all traceable monetary transactions, not just Mobile Money services. The new 2022 finance bill currently before the country’s parliament, however, exempts bank transactions and transfers for the settlement of taxes and other taxes.

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“Money transfers are taxed in the following ways: To the exclusion of bank transfers and transfers for the settlement of taxes, duties, and taxes, money transfer operations carried out by any means, in particular, through electronic means, mobile telephony, telegraph, or telex or fax; cash withdrawals resulting from a money transfer made to financial institutions or mobile companies,” the document reads, in part.

Here Is What You Need To Know

  • Under the proposed law, the aforementioned tax rate will be levied when sending and withdrawing money. It will then be transferred to the national treasury by the service providers, no later than the 15th of the month following the month in which the operations were carried out.

“The tax on money transfers is collected by the service providers and is paid monthly no later than the 15th of the month following the month in which the transactions were carried out with their corresponding tax center,” the draft bill states. 

  • As a reminder, the Cameroonian state has, in the past, expressed its dissatisfaction with the low tax revenue it derives from monetary transactions by telephone. 
  • However, despite the absence of specific regulatory texts, the two main providers, Orange and Mtn, already pay various taxes such as value added tax. They also claim that they are paying the administration a fee related to the aforementioned activity, which increases the costs of sending and picking up. 
  • There is no doubt that the regulatory framework that will be set after the adoption of the next budget law by parliament will lead to further increases.
  • In Cameroon, financial transactions via mobile money totaled 12,151 billion FCFA in 2020, according to data from the Bank of Central African States (Beac). With a similar transaction volume in 2022, the State could earn up to $25 billion in the mobile money category alone. 

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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.
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