Cameroon, arguably, is one of the most active startup ecosystems in Central Africa. With a population of 25 million, 23% of which is connected to the internet, the country is poised to become a regional hub for startups, albeit its controversial political regime. Under the draft 2021 Finance Law project, startups in the central African country, especially those in the field of information and communication technologies (ICT), would benefit from a range of tax incentives.
Here Is What You Need To Know
In the incubation phase, which cannot exceed 5 years, these startups will benefit from an exemption from all taxes, duties, taxes and fees, with the exception of social contributions.
Upon exiting the incubation phase and in the event of the startup being sold, a reduced rate of 10% will be applied to the capital gains on the sale.
In the event of entry into the operating phase, the company also benefits for a period of five years from an exemption from the license registration fees as well as increase of share capital. Again, all taxes and employer charges on salaries paid to their employees, with the exception of social contributions would be exempted.
In addition, the draft text provides for the application of a reduced corporate tax rate of 15%; an application of a 50% allowance based on the calculation of the deposit and the minimum collection of corporate tax; an income tax credit of 30% on research and innovation expenses capped at CFAF 100 million; the application of a reduced rate of tax on income from movable capital of 5% on dividends paid to shareholders and interest paid to investors.
Beyond the fifth year of operation, a common law tax regime will be applied
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
Mobile phone subscribers in Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea and Chad will soon be exposed to a small revolution. By decision of the Bank of Central African States (BEAC), telephone credit will no longer be presented in CFA francs. A directive that follows on from the one recently given by the institution on the use of units as a means of payment.
Abbas Mahamat Tolli, governor of BEAC
“The BEAC takes this opportunity to recommend, through you, to the members of your association and to all the mobile telephone concession operators in Cameroon and more broadly in the CEMAC, to avoid any presentation, use or operation of telephone credit units in CFA francs which is likely to cause confusion with the legal tender in force in the Member States ”, Abbas Mahamat Tolli, governor of BEAC, explained in his letter to operators.
Central Africa telephone credit Central Africa telephone credit
If ever this recommendation is respected or becomes quite simply imperative, the words “CFA franc” or “F” will no longer appear in messages concerning the balance of telephone accounts. The Central Bank thus wants to avoid any confusion between units and legal tender. Operators will therefore have to find something else.
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
Ghana may well be the next African country to get a Startup Act after Tunisia and Senegal. The country has officially launched the drafting process of the much-anticipated Ghana Startup Bill in Accra.
Business Development Minister, Dr Ibrahim Mohammed Awa
“We have formed a committee working on the Startup Bill and within two months, it will be ready for the cabinet’s consideration and Parliamentary approval,” Ghana’s Business Development Minister, Dr Ibrahim Mohammed Awa said after the third Ghana Business Awards Night on Friday, October 30. “When this bill is passed it means you can start a business, and for eight to 10 years you will not pay taxes. This is to encourage young people to put back the profit and expand the business.”
Here Is What You Need To Know
The drafting committee is made up of notable bodies such as Ghana’s National Entrepreneurship and Innovation Program (NIEP), Ghana Chamber of Young Entrepreneurs (GCYE), Ghana Start-up Network (GSN), Ghana Hubs Network (GHN), i4Policy and Private Enterprise Federation (PEF) with funding and technical support from GIZ Make IT.
A Technical Working Committee, made up of experts and the ecosystem enablers has equally been setup to champion the advocacy action for the development and enactment of the proposed Ghana Startup Act.
The Scope Of The Proposed Bill
The committee, which has a mandate to within three months engage widely with all relevant stakeholders to come out with a draft Ghana Start-up Act, will among other things deliberate to;
Set up an incentive framework for the creation and development of Start-ups in Ghana to promote creativity, innovation, and the use of new technologies in achieving a strong added value and competitiveness at the national, regional, and district levels.
Provide the legal backing for business starting and promotion of Start-ups for decent job and wealth creation, in accordance with the SDG 8, among others.
The committee will then present its final work — the draft Ghana Start-up Act, to the NEIP and subsequently to the Ministry of Business Development, Ministry of Trade and Industry, Attorney General, Parliament of Ghana, and the Office of the President, after which they will run series of advocacy to ensure the Act is passed by Ghana’s legislature.
“Startups are the basics to create jobs and wealth in this country,” Dr Awa said. “We want to help start young people grow and this Startup Bill will be able to help them [youth] own their businesses and not look up to government for job; because we all know that the jobs are not in the public sector, they are in the private sector.
“So we [government] want to create an enabling environment in the private sector that can make it attractive to young people for them to engage in,” he emphasised.
For enthusiasts and players within the Ghanaian startup ecosystem, a dedicated website for the Bill — www.ghanastartupact.org has been created. The committee intends to publish every stage of the journey on the website. Members of the public are therefore invited to share their inputs, comments, and recommendations via comment boxes and dedicated phone numbers which will be listed on the website.
“Passing this Act will help to a larger extend, curb the perennial youth unemployment and under-employment canker which has been a timebomb being sat on by the state Ghana,” the Project Coordinator, Mr. Sherif Ghana said.
The Era of Startup Act
The first specific startup law globally was passed in Italy in 2012, and Africa is increasingly catching on. Tunisia and Senegal are the only countries in Africa that have passed the Act, although plans are being mulled by Rwanda, Kenya, Ethiopia, Mali to follow suit.
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
It appears as though regulators in Kenya are hell-bent on making sure that SportPesa (the Nairobi-based sport betting firm that recently announced its return to the East African country after a one-year absence) never returns to the country. In a new twist of events, Kenya’s Betting Control and Licensing Board (BCLB), under the chairmanship of Cyrus Maina, has written to insist that the betting firm is never ever going to do business under Sportpesa till further notice.
SportPesa CEO Ronald Karauri
“According to information in our possession, the trading name Sportpesa belongs to Pevans East Africa, a company which has filed an appeal in court over its gaming licence and the matter, case number 471 of 2019, will be heard on November 16, 2020,” Maina stated in the letter.
Why The Frustrations?
Things look more legal than logical. On October 30th 2020, SportPesa declared that it was back on the Kenyan betting scene after a one-year absence. Part of the reasons for its absence is because the betting firm’s previous license was among the 27 licenses revoked by the Kenyan Revenue Authority and Betting Control and Licensing Board for failure to comply with increase in gambling tax rates from 10 to 20 percent. The revocation was enforced despite a Kenyan High Court ruling blocking collection of the tax. Since then, SportPesa has been in court.
As a way to get around the revocation, Pevans East Africa (owner of SportPesa) then assigned its full rights under its tradename [SportPesa], for five years, to another gaming firm, known as Milestone Games Limited (under the trademark, Milestone Bet), which had been newly licensed by BCLB.
However, BCLB through Maina said this return would not be allowed as SportPesa, being the property of Pevans East Africa, is still subject to a pending court case over its own license. This, according to Maina, prevented another licensee from using the brand name of SportPesa.
Consequently, Maina and his Board had proceeded to suspend Milestone’s new operating license and had equally asked payment providers such as Safaricom, which owns the popular M-Pesa mobile payment service, to stop processing transactions for the site.
He further proceeded to state that “the known owners of the trading name Sportpesa are not licensed to operate in the gaming business in Kenya,” a statement which leaves Sportpesa’s future in the east African country still foggy even when the appeal concludes.
Currently, Sportpesa’s new Kenyan site is still accessible in Kenya, but players may not withdraw, deposit or bet.
Maina said that Milestone may continue to trade using the Milestone Bet brand.
A Nigerian Company, BetKing, Has Since Replaced SportPesa?
In July this year, the Football Kenya Federation (FKF) President Nick Mwendwa announced that Betking, a Nigerian betting firm, had struck a deal with the federation.
By the terms of the new deal, the Nigerian company agreed to offer KSh 1.2 billion ($11 million) sponsorship to Kenya premier league clubs for a period of five years, a function previously performed by Sportpesa. The announcement by the Kenya Football Kenya Federation (FKF) President Nick Mwendwa that Betking, a Nigerian betting firm, had signed a KSh 1.2 billion sponsorship deal for the local league raised eyebrows and instantly sparked rage on social media. Tuko Media reported that disgruntled Kenyans trooped to social media pages to express anger and bitterness following entry of a foreign betting firm months after a homegrown company was banned. Both Sportpesa and Betin stopped doing business in the country due to what they saw as a hostile tax environment.
The Background To All These
In 2019, both SportBesa and Betin stopped doing business in Kenya due to what they saw as a hostile tax environment.
The government in Nairobi hiked gambling tax rates from 10 to 20 percent.
In its ruling, the court determined that the tax could only be applied to a player’s winnings at the end of every month, and that the Kenyan Revenue Authority must collect revenue from customers, rather than directly from operators.
Ronald Karauri welcomed the ruling, suggesting that it may prompt it to reconsider its withdrawal from the Kenyan market.
“We have long advocated for a fair and level playing field and a regulatory and taxation environment that both supports business and inward investment, and is in the interests of Kenyan consumers,’’ he said.
“SportPesa will now reconsider the future of its operations in Kenya,” he added. “We encourage the authorities to take the Tax Appeals Tribunal ’s ruling fully on board and to now apply a reasonable approach to gambling regulation and taxation, in line with international best practice.”
The dispute over the winnings tax dates back to its introduction, with SportPesa arguing the tax removed incentive for customers to place bets.
Although the Kenyan High Court initially blocked collection of the tax, the Kenyan Revenue Authority and Betting Control and Licensing Board agreed on 1 July to withdraw the licences of 27 companies who failed to pay the levy, including SportPesa and Betin.
After the state ordered telecoms company Safaricom to block banking services to the 27 companies, leaving customers unable to deposit funds — a move SportPesa said violated a court order — SportPesa ended its sport sponsorships in Kenya and placed its 453 employees in the company on leave.
A SportPesa spokesperson told iGamingBusiness.com in early September that the company believed it was heading towards the resumption of normal operations after constructive talks. However, on 19 September, the Kenyan Parliament’s Finance Committee proposed a new 20% excise tax rate on betting stakes in the 2019/20 budget, an increase from the 10% stake proposed by the treasury in June.
In response, SportPesa that it would not operate in the country until the rate was changed, and laid off its Kenya-based employees.
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
In Burkina Faso, a new platform to support business creation and investment has been set up for members of the diaspora. Called Diaspora Burkina, it was launched on October 27 by the country’s Ministry of Trade, Industry and Handicrafts, and that of African Integration and Burkinabés Abroad.
The new tool, developed as part of the Burkina Faso Diaspora Entrepreneurship Support Project (PAED-BF), aims to serve as a support support for the diaspora in its entrepreneurial initiatives. It offers Burkinabés abroad an online business creation system, access to a network of project facilitators, access to investment opportunities and calls for tenders, as well as advertising offers.
Burkina Faso diaspora fund Burkina Faso diaspora fund
According to local media, the project, fueled since 2018 by the Agency for the Financing and Promotion of Small and Medium-Sized Enterprises (AFP-PME), plans to allocate at least 20% of the financing of national funds to diaspora initiatives. There are also plans to invest annually in at least 50 diaspora-owned SMEs, as well as business creation within 72 hours.
Through this platform, Burkina Faso intends to facilitate the integration of its nationals into local economic development through entrepreneurship.
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
One year ago, Kenya’s leading sport betting firm, SportPesa, shut down its Kenyan operations and sacked more than 450 of its workforce. Last year, the Kenyan Parliament’s Finance Committee had imposed a new 20% excise tax rate on betting stakes, representing an increase from the 10% stake which the treasury had proposed in June 2019. SportBesa and its major competitor Betin couldn’t bear it. Although a Kenyan High Court initially blocked collection of the tax, the Kenyan Revenue Authority and Betting Control and Licensing Board agreed on 1 July, 2019 to withdraw the licences of 27 companies who failed to pay the levy, including SportPesa’s and Betin’s.
Captain Ronald Karauri, SportPesa’s CEO
Now, one year after, SportPesa is back, but under a different license, even though another High Court in Kenya had declared Thursday the new laws, including the Finance Act 2018, the Tax Laws (Amendments) and the Statute Law (Miscellaneous Amendment), which contained the new betting tax rate as illegal.
“SportPesa is back! I’m happy to announce that the SportPesa brand is back under a new BCLB licence holder, ” tweeted betting firm’s ceo Captain Ronald Karauri.
The Background To All These
In 2019, both SportBesa and Betin stopped doing business in Kenya due to what they saw as a hostile tax environment.
The government in Nairobi hiked gambling tax rates from 10 to 20 percent.
In its ruling, the court determined that the tax could only be applied to a player’s winnings at the end of every month, and that the Kenyan Revenue Authority must collect revenue from customers, rather than directly from operators.
Ronald Karauri welcomed the ruling, suggesting that it may prompt it to reconsider its withdrawal from the Kenyan market.
“We have long advocated for a fair and level playing field and a regulatory and taxation environment that both supports business and inward investment, and is in the interests of Kenyan consumers,’’ he said.
“SportPesa will now reconsider the future of its operations in Kenya,” he added. “We encourage the authorities to take the Tax Appeals Tribunal ’s ruling fully on board and to now apply a reasonable approach to gambling regulation and taxation, in line with international best practice.”
The dispute over the winnings tax dates back to its introduction, with SportPesa arguing the tax removed incentive for customers to place bets.
Although the Kenyan High Court initially blocked collection of the tax, the Kenyan Revenue Authority and Betting Control and Licensing Board agreed on 1 July to withdraw the licences of 27 companies who failed to pay the levy, including SportPesa and Betin.
After the state ordered telecoms company Safaricom to block banking services to the 27 companies, leaving customers unable to deposit funds — a move SportPesa said violated a court order — SportPesa ended its sport sponsorships in Kenya and placed its 453 employees in the company on leave.
A SportPesa spokesperson told iGamingBusiness.com in early September that the company believed it was heading towards the resumption of normal operations after constructive talks. However, on 19 September, the Kenyan Parliament’s Finance Committee proposed a new 20% excise tax rate on betting stakes in the 2019/20 budget, an increase from the 10% stake proposed by the treasury in June.
In response, SportPesa that it would not operate in the country until the rate was changed, and laid off its Kenya-based employees.
A New Chapter
According to CEO Kanauri, SportBesa’s new journey will begin with a different license, Betting Control and Licensing Board (BCLB)licence.
Mr Karauri said SportPesa will uphold the highest standards of service and responsible gaming, adding that they are ready to work closely with BCLB and all other stakeholders in the gaming industry.
“As market leaders, SportPesa will focus on upholding the highest standards of service and responsible gaming. We look forward to working closely with BCLB and all other stakeholders,” Karauri said.
“We are excited to explore a wide range of partnerships in Kenya over the coming weeks and months, which will prioritise the development of sports in communities across our great country,” he added.
SportPesa will now join at least 10 other companies which are currently operating in the country. They include Betway, Mozzart Bet, Odi Bets, Eastleigh Bet, Lucky to you, Ken bookmakers, Bet boss, Kick off, Easi bet and Palms bet.
SportPesa has footprints in Tanzania, South Africa, Italy, Ireland, the Isle of Man and the United Kingdom.
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
Investors in Kenya need to be worried. The country’s Attorney General has opened a new web portal for mining details of investors who own more than 10% stakes in companies through secret accounts in efforts to unveil illicit wealth.
Kenya’s Attorney-General Kihara Kariuki
This follows Kenya’s Registrar of Companies’ launch of a new electronic register for filling data on beneficial owners on October 13th, 2020. Information from the register will thereafter be made available to the Kenya Revenue Authority (KRA), security agencies and the Financial Reporting Centre, that is tasked with tracking illicit wealth.
“A company shall take reasonable steps to identify the beneficial owners,” says Kenya’s Attorney-General Kihara Kariuki in a regulation. “It is the companies’ duty to investigate and obtain beneficial owner particulars.”
Kenya web portal investors Kenya web portal investors
Following the opening of the new register, it is now mandatory for new firms in Kenya to fill the beneficial ownership registers ahead of registration.
The new portal will contain the investor’s names, phone numbers and residential addresses.
For companies already in existence, the deadline for filing the register is next month, November, during which they will be expected to update their shareholder records.
With the new rules, Kenya hopes to curtail insider trading. This includes shedding light on market activity by restricting the use of nominee accounts that investors have been using to evade ownership limits in firms listed on the Nairobi Securities Exchange.
With the new rules, the country also hopes to curb money laundering. Kenya hopes to achieve this by revealing the true identities of investors owning large blocks of shares in both private and listed companies.
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
Just four days before the hotly contested presidential election in Tanzania held on October 28, the Tanzania Communication Regulatory Authority (TCRA) ordered telecommunications service providers to suspend access to the internet, short messaging (SMS) and voice services en masse.
Felicia Anthonio, Campaigner and #KeepItOn Lead at Access Now
“Confirmed: Widespread disruption to social media registered across #Tanzania on eve of elections; high impact to Twitter, WhatsApp, Instagram and Google services on Vodacom, Airtel, Tigo, Halotel and Zantel; incident ongoing #TanzaniaElections2020,” NetBlocks.org, an internet observatory noted in a tweet.
Here Is What You Need To Know
This is the latest development in a series of government actions aimed at undermining digital rights in the country.
Access Now, along with 28 human rights groups around the world who are members of the #KeepItOn coalition, through an open letter, urgently called on President John Magufuli and TCRA Director James Kilaba, to ensure that the internet and all other communication channels are open, secure and accessible throughout the election period and beyond.
“The introduction of such restrictive measures aimed at limiting people’s online and offline rights undermines the possibility of a free, fair and transparent election,” said Felicia Anthonio, Campaigner and #KeepItOn Lead at Access Now . “The Tanzanian government must ensure an open and accessible digital space for all by immediately ending these premeditated acts aimed at preventing people from actively engaging in the electoral process,” he said.
Tanzania internet shutdown Tanzania internet shutdown
“Internet is being blocked in #Tanzania since yesterday,” said ProtonVPN in a tweet. “The eve of an important election. Authorities are now trying to block VPN services. ProtonVPN signups are impacted because SMS verification code messages are being blocked (email verification works, for now).
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
The small southern African country of Lesotho, home to roughly 2 million people and with a land mass as small as Oyo State in south western Nigeria, no longer wants foreign ownership of most businesses in the country. The country’s minister of trade and industry, Thabiso Molapo has issued a new set of licensing regulations to that effect.
minister of trade and industry, Thabiso Molapo
“The regulations were triggered by a realisation that the majority of businesses are owned by foreigners,’’ Tšita-Mosena Movement for Economic Change (MEC) deputy leader, who filed a motion in Parliament earlier this year that gave birth the new legislation, called the Business Licensing and Registration Regulations 2020, said.
Here Is What You Need To Know
According to Tšita-Mosena, it has become unbearable for businessmen in Lesotho to be part of most businesses as they have been literally chased out by foreigners who have invested in small businesses around the country.
The new regulations therefore bar foreigners in the country from owning and operating certain businesses.
Here Is A List Of Businesses In Which Foreigners Are Shut Out
International road freight and logistics, road transport and logistics, and motor dealership.
Real estate agencies, clearing agencies; warehouse activities, retail sale of household fuel such as paraffin, bottled gas and coal.
Fast food businesses without operating full restaurant services, hairdressing and beauty treatment salons.
Repair and maintenance of motor vehicles and motor cycle businesses.
Businesses of cleaning cars; raising of livestock or sale of livestock or their products.
Tour services and operations.
Cleaning company; landscape care and maintenance services.
Photographic businesses.
Businesses via stalls and market of food, beverages and tobacco products.
Businesses of selling any textiles, clothing or footwear via stalls.
Business agents or brokers in any specialized stores, including wholesale and retail sale of health-related articles or products.
Sale of animal feeds, including animal and crops medical goods and chemicals.
Sale of bread and confectionary products.
Sale of motor parts and accessories.
Motor vehicle repair businesses which includes the sale of vehicle tyres, parts and motor-cycle parts.
Sale of alcoholic beverages whether or not consumed on the spot or not, meaning they cannot own off-sales, taverns, shebeens and public bars.
Wholesale and retail sale of meat and meat products, fruits and vegetables.
Sale of prepared meat and meat dishes whether consumed on the spot without operating full restaurant services.
Supply of liquefied petroleum gas and petroleum products.
Retail sale of hardware, paints and glass products, pharmaceutical and medical goods, cosmetics and toilet articles in specialized stores, including wholesale and retail sale of health-related articles or products.
Mobile food services and other food services.
Printing and business support services such as photocopying, document preparation and other specialised office support services.
Electrical, plumbing and other construction installation activities.
Welding or ownership of metal waste or scraps.
Repair of footwear and clothing.
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
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.
tax
“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.
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
