Circular N°00000242/C/MINFI of 30 December 2020 on instructions relating to the Execution of Finance Laws, the Monitoring and Control of the Execution of the State Budget

Circular N°00000242/C/MINFI of 30 December 2020 on instructions relating to the Execution of Finance Laws, the Monitoring and Control of the Execution of the State Budget and other Public Entities for the year 2021.

In order to ensure the efficient and harmonious execution of public budgets for the year 2021 by all central, decentralised and subsidised administrations, the Minister of Finance of the Republic of Cameroon signed Circular No. 00000242/C/MINFI of 30 December 2021 to lay down instructions relating to the Execution of Finance Laws, the Monitoring and Control of the Execution of the State Budget and other public entities for the year 2021 (the "Circular")

This Circular contains numerous instructions and measures formulated for the heads of public administrations, heads of enterprises and public establishments, heads of executives of decentralised territorial collectivities, project managers and the like.

Ø Measures relating to the optimisation of the mobilisation of tax, customs and non-tax revenues.

ü Measures relating to the optimisation of tax revenue mobilisation

In accordance with the Circular, the tax measures relating to the optimisation of tax revenues are numerous. A reading of the 2021 Finance Act and Ordinance N°2020/0001 of 03/06/2020 amending the Finance Act for the year 2020 reveals the following measures

- The reinforcement of the system of taxation of capital gains on the transfer of shares of Cameroonian companies abroad through the obligation of spontaneous declaration of direct and indirect transfers made abroad;

- The clarification of the registration regime for agreements assimilated to the transfer of business assets;

- The reinforcement of the conditions of deductibility of interest remunerating advances in current account, through the requirement of full payment of the subscribed capital and the existence of a written and duly registered loan agreement;

- The affirmation of the principle of a simplified annual recapitulative tax return for taxpayers with only salary income and passive income such as investment income and rent;

- Prohibiting the payment of taxes and duties in cash to the tax network and generalising the payment methods in force in the specialised management units to the computerised divisional tax centres;

- The establishment of telepayment as a compulsory method of payment of taxes for large companies in the portfolio of the DGE;

- Establishment of the delivery and notification of receipts by electronic means;

- Establishment of the notification of the notice of assessment (AMR) by electronic means;

- The revision of the time limit from 30 to 15 days for the payment of taxes and duties issued on AMR following the failure to declare or pay;

- Establishing the possibility of initiating forced collection measures against marketers, who are actually liable for this levy in order to secure revenue from the tax on petroleum products (TSPP);

- The institution of solidarity in the payment of the felling tax between companies that acquire logs on the local market and the forest exploiter, including associations and common interest groups that exploit community forests;

- The submission to ad valorem excise duty of goods imported into Cameroon and likely to be produced locally at a rate of 25% for certain products and 5% for other products.

ü Measures relating to the optimisation of customs revenue mobilisation

In accordance with the 2021 Finance Law, Ordinance N°2020/0001 of 03/06/2020 amending the Finance Law for the financial year 2020 and the circular, the following customs measures

- Exemption from customs duties and taxes for the benefit of farmers, breeders and pharmaceutical personnel for imports of certain inputs for agriculture and the pharmaceutical industry, materials, equipment and goods;

ü Measures relating to the optimisation of the mobilisation of non-tax revenues

Ø Measures to support the revival of the economy.

- The free registration of agreements for the repurchase and securitisation of domestic public debt;

- The renewal for the 2021 fiscal year of the special transaction instituted by the 2020 Finance Act;

- Reducing the tax burden of companies affected by the health crisis through

- Reducing the rate of income tax for small and medium-sized enterprises from 30% to 28%;

- The abolition of the axle tax for the benefit of transporters;

- The exemption from corporate tax for the hotel sector;

- The renewal of the suspension of the tourist tax;

- The reduction from 4% to 3% of the rate of the felling tax for forestry companies that can justify a certification in terms of sustainable forest management;

- The opening of the option for the monthly payment of the annual forestry tax;

- The extension by one year of the carry-over period for tax losses and depreciation deemed to be deferred for companies in sectors directly affected by COVID-19;

- The consecration of the deductibility of capital losses on the transfer of receivables of companies undergoing restructuring in sectors directly affected by COVID-19;

- The registration of fixed duties on the transfer of receivables of restructuring companies affected by the crisis;

- The abolition of the condition of approval of the investment code for the benefit of the application of the fixed duty on the assumption of liabilities during operations of partial contributions of assets;

- The full deductibility of donations made by companies to the state in the context of the fight against COVID-19.

Ø Measures to improve the business climate, the business environment and the social climate.

The following measures have been taken to improve the business climate

- The establishment of a proactive tax system to promote innovative start-ups in the ICT field;

- The reduction from 2 to 1.5% of the rate of the advance income tax (AIR) and the minimum AIR collection for companies opening their capital on the CEMAC stock exchange;

- The institution of a flat-rate deduction threshold for brewing companies set at 0.5% of production volume;

- The clarification of the VAT territoriality regime on the supply of services;

- The deferral of tax deficits for a period of six years for credit institutions and companies in the State's portfolio undergoing restructuring;

- Raising the exemption threshold for savings account interest from capital gains tax from CFAF 10 million to CFAF 50 million;

- The consecration of the eligibility for the reimbursement of VAT credits of organisations that have signed agreements with the State;

- The extension of the tax system for the promotion of youth employment to companies benefiting from derogatory tax systems and to SMEs that are members of approved management centres;

- The replacement of the taxpayer's card by the registration certificate issued online and whose validity is unlimited;

- The principle of the compulsory holding of a final contradictory working session at the end of the control, the principle of the lapse of customs investigations not closed within the regulatory time limits, the principle of the non-overlapping of customs controls with the same taxpayer, the principle of the closure of any a posteriori control by notification of the signatory of the mission order;

- The principle of the resumption of an audit on the same subject and the same period only in the event of the discovery within three years of new elements concealed from the auditors by the audited entity;

- The consecration of jurisdictional and non-jurisdictional guarantees to protect the rights of taxpayers;

- The establishment of a three-tiered system for examining appeals in customs matters;

- The introduction of new measures to combat commercial fraud.

Ø Measures to improve the quality of public spending

In order to improve the quality of public expenditure in Cameroon, many measures were taken within the framework of the Circular. These measures are as follows

- The strengthening of the verification mechanism of the inter-ministerial control committee and reminders;

- The perpetuation of the achievements of the 2018 Physical Count of State Personnel (COPPE);

- Controlling and securing the file of beneficiaries of disability pensions and beneficiaries;

- The effective monitoring of the file of personnel housed by the State;

- Notification in advance of monthly salary and pension expenses, monthly quotas of recalls resulting from the processing of files in the pay chain to the various administrations;

- Prohibitions on the accumulation of benefits, the payment of additional amounts and the extension of benefits to staff who should not receive them;

- Rationalisation of the allocation of allowances related to the work of committees and working groups;

- Rationalisation of expenses related to scholarships and internships;

- The prohibition of the payment of overtime other than that relating to the current budgetary year;

- Privileging medical evacuations to public hospitals to the detriment of private hospitals;

- The scrupulous respect of the legal provisions on funeral expenses in the event of the death of a public official;

- The requirement for authorising officers to draw up a budget expenditure commitment plan at central level by 20 January 2021 at the latest;

- Controlling water, electricity and telephone expenses;

- Optimising the management of counterpart funds.