Dr. William Hermann ARREY
Directeur Exécutif par Intérim, Fondation Denis et Lenora Foretia Mme Fri LEHFUNE ASANGA
Directrice des Opérations, Fondation Denis et Lenora Foretia Mme Agathe DJOMEGHU
Directrice des Programmes, Fondation Denis et Lenora Foretia
Dr Jean Cédric KOUAM (Rédacteur en Chef)
Chef de la sous-section politiques fiscale et monétaire, Nkafu Policy Institute Dr Vera KUM
Chercheure associée en Affaires économiques, Nkafu Policy Institute M. Ulrich D’POLA KAMDEM
Analyste principal des politiques économiques, Nkafu Policy Institute M. Henri KOUAM TAMTO
Analyste des politiques économiques, Nkafu Policy Institute M. DINGA Appolinaris TAMBI
Assistant de recherche, Nkafu Policy Institute
M. Stéphane DOUANLA Graphic Designer
ÉQUIPE DE RÉDACTION
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DIRECTEURS DE PUBLICATION
T
he COVID-19 pandemic has imposed unprecedented negative consequences on the Cameroonian economy. To reduce the spread of the virus, the government imposed a range of measures such as social distancing and border closures to protect its citizens. While the social costs leave little to be desired, the pandemic equally took a toll on a majority of sectors across the economy, impacting wages, consumer spending, and profitability for businesses.This fiscal policy letter analyzes the amended budget, delving into aspects related to the Covid-19 pandemic, as well as the structural factors that could determine the viability and sustainability of public finances in the coming decades. The first article looks at the implications of the pandemic for domestic revenue tax mobilization with the aim of improving the personal income and non-oil tax in the business sector. It recommends that the government consolidates public sector spending, reduces taxes on businesses in the non-oil sector, and suspend tax payments on businesses as the pandemic abates.
Meanwhile, the recently imposed phone tax is found to be punitive, which leaves policymakers room to boost revenues from other digital sources that relate to the use and storage of data, other important findings include the use of public- private partnerships as a tool to boost public sector efficiency and innovation.
Amidst all this, it is essential to note that public sector effectiveness is futile without effectively decentralizing some aspects of public sector management.
This letter finds that localities and regions stand to benefit from decentralization in several ways, from economic development, greater transparency, social cohesion, better procurement, and employment.
This letter concludes with a paper on intergenerational equity. It shows that the current method for public policy should give priority to economic development in a way that benefits the business sector. The results show that by developing free market policies that support the creation and management of enterprises, the state becomes better positioned to obtain the tax revenues it has set itself in the National Development Strategy (NDS30), while preserving intergenerational equity in tax payments.
Dr. William Hermann ARREY Directeur Exécutif par Interim Denis & Lenora Foretia Foundation
Éditorial
Éd it or ia l
L.1 : Analyse de la dynamique fiscale du Cameroun en 2020 7 1. Introduction
2. La nature des revenus fiscaux au Cameroun 3. Evolution des impôts au Cameroun en 2020 4. Recommandations de politiques économiques 5. Conclusion
L.2: The role of public-private partnerships in the implementation
of online tax payment in Cameroon 11 1. Introduction
2. Challenges faced by Cameroon in its digitalisation process 3. PPP for an efficient digital tax system
4. Conclusion
L.3: Implications of the recent phone tax in Cameroon and key
lessons from Rwanda 16 1. Introduction
2. The imposition of a phone tax…
3. The Government in dire need of tax revenues
4. It is now clear why the government needs additional tax revenues;
5. Why a phone tax?
6. Government tax revenues are exposed to the global business cycle
7. A Jupeterian phone tax will reduce financial inclusion and reverse development Gains 8. Lessons from Rwanda 2011 – 2015
L.4: Fiscal Decentralization and Fiscal Policy in Cameroon 20 1. Introduction
2. Emerging Trend of fiscal decentralization
3. The Trend of Fiscal Decentralization in Cameroon 4. Applicability of fiscal decentralization in Cameroon 5. Effects of fiscal decentralization on fiscal policy
6. Negative effects of fiscal decentralization on fiscal policy 7. Recommendations
8. Conclusion
L.5 : La politique fiscale post Covid-19 au Cameroun : Quelle place pour
l’équité intergénérationnelle ? 27 1. Introduction
2. Une réponse gouvernementale principalement axée sur des mesures d’exonérations de taxe et report de paiement
3. Charge fiscale et générations futures : la nécessité de promouvoir la libre entreprise
T ab le d e m at ièr es
Table de matières
1 Analyse de la dynamique fiscale du Cameroun en 2020
Par Ulrich D’POLA KAMDEM –
Senior Economic Policy Analyst au Nkafu Policy Institute
Résumé :
L’objectif de cette note est d’analyser la dynamique fiscale du Cameroun en 2020. En prenant appui sur les lois de finances de la République du Cameroun, la note montre que le Cameroun tire ses revenus fiscaux de deux principales sources à savoir les impôts directs et impôts indirects. Cependant, on constate que la tendance haussière de la politique fiscale camerounaise au cours des années
précédentes s’est estompée en 2020 avec la survenance de la pandémie de coronavirus. Dans l’optique d’amorcer de manière sereine une reprise en 2021, la note propose aux autorités camerounaises d’actionner directement trois leviers à savoir : la réduction du train de vie l’Etat, l’amélioration des dépenses en capital ou d’investissement et le soutien sur le plan fiscal aux entreprises formelles.
Introduction
En Novembre 2020, le Nkafu Policy Institute a rendu public les résultats d’un rapport thématique sur le budget 2020 au Cameroun. L’objectif de ce rapport était d’analyser la résilience de la politique budgétaire camerounaise en se focalisant sur la viabilité de la dette de l’Etat et la promotion de la libre entreprise. Utilisant une approche démonstrative, les auteurs dudit rapport, Kakdeu et al1. (2020) , ont collecté des données secondaires de
1. Kakdeu, L.M., Kouam, J.C., Moudio, M.J., D’Pola, K.U., & Egoh, M.A., ‘‘Rapport sur le Budget 2020 au Ca- meroun’’, Rapport Thématique – Projet DBI, Nkafu Policy Institute, Denis & Lenora Foretia Foundation, November 2020.
différentes sources officielles et se sont servis des outils de l’analyse statistique (statistiques descriptives notamment) pour livrer des résultats riches en enseignements. L’objectif de cette note est de condenser les implications de cette étude en ce qui concerne la fiscalité au Cameroun. Pour ce faire, nous étudions la nature des revenus fiscaux en 2020 au Cameroun (paragraphe 1) et analysons l’évolution de ces revenus (paragraphe 2). Ceci nous permet de présenter, dans le paragraphe 3, des recommandations opérationnelles en matière de politiques économiques.
La nature des revenus fiscaux au Cameroun
Le Cameroun tire ses revenus fiscaux de deux principales sources à savoir : les impôts directs et les impôts indirects. Sans
être exhaustif, le tableau 1 ci-dessous donne un aperçu des composantes de ces sources.
Tableau 1 : Décomposition des sources de revenus fiscaux au Cameroun
Source : Réalisé par l’auteur (inspiré du rapport sur le budget 2020 au Cameroun).
En 2020, l’économie camerounaise a subi les contrecoups de la crise sanitaire liée à la pandémie de coronavirus. Les restrictions sévères sur les activités économiques, au plan international et continental, ont poussé les décideurs publics à revoir à la baisse, leurs prévisions de recettes fiscales.
Ainsi, dans la Loi de finances rectificative du 03 Juin 2020, les recettes fiscales du Cameroun pour le compte de l’année 2020 s’établissaient à 2374,847 milliards de Francs CFA soit une baisse de l’ordre de 18,78% par rapport à l’exercice 2019.
Evolution des impôts au Cameroun en 2020
Malgré la survenance de la pandémie de coronavirus, il convient de noter que les impôts directs sont sur une tendance légèrement haussière au Cameroun depuis 2016. En effet, selon le rapport sur le budget 2020 au Cameroun, ils représentaient 16,73% du budget global
en 2016 contre 16,80% en 2020 soit une différence de 0.07%.
De manière spécifique, dans ce rapport, on constate que l’impôt sur le revenu des personnes physiques est en légère hausse passant de 5,02% en 2018 à 6,22% en
Impôts directs Impôts indirects
Impôt sur le revenu des personnes phy-
siques Taxes sur les ventes
Impôt sur les sociétés Taxe sur la valeur ajoutée Prélèvements sur les salaires et de la
main d’œuvre Taxe sur le chiffre d’affaire
Impôts fonciers Taxe sur le commerce international
Droits d’accises
2020. L’impôt sur les sociétés non pétrolières, quant à lui, connait une évolution en dents de scie. Il se situe à 7,44% du budget global en 2017 ; ensuite 6,90% en 2019 ; enfin 7,48% en 2020.
Les impôts indirects, pour leur part, semblent suivre cette tendance. En effet, l’analyse des lois de finances de la République du Cameroun entre 2017 et 2020 montre que la taxe sur la valeur ajoutée et le chiffre d’affaires subissent une baisse de 4,06 points par rapport à l’exercice 2019 et ne représente plus désormais que 20.70% du budget
global en 2020. De même, on observe une légère baisse des recettes issues des taxes sur les services déterminés et droits d’accises. Ces recettes représentent 7,62% du budget global en 2020 contre 6,86% en 2019 et 7,06%
en 2017.
Globalement, la tendance haussière de la politique fiscale camerounaise au cours des années précédentes s’est estompée en 2020 avec la survenance de la pandémie de coronavirus. Le tableau 2 ci-dessous permet d’en avoir une illustration parfaite.
Tableau 2 : Evolution des sources de revenus fiscaux au Cameroun
Source : Calcul de l’auteur (inspiré des données du rapport sur le budget 2020 au Cameroun).
Note : Chiffres exprimés en milliards de Francs CFA.
2017 2018 2019 2020
Impôts directs 719,08 723,30 779,95 740,98
Variation par rapport à l’année précé-
dente – impôts directs 4,225
(0,59%) 56,65
(7,83%) -38,97 (-4,99%)
Impôts indirects 1988,73 2144,05 1633,867
Variation par rapport à l’année précé-
dente – impôts indirects 155.32
(7,81%) -510,18 (-23,79%)
Recommandations de politiques économiques
Le rapport sur le budget 2020 au Cameroun a permis de constater que pris indépendamment, certains impôts indirects avaient une influence négligeable sur la croissance économique du pays. Il s’agit par exemple : des taxes sur les services déterminés, les impôts sur le droit d’exercer une activité professionnelle, les autres impôts et taxes sur les biens et services, les droits et taxes à l’exportation et autres
impôts sur le commerce extérieur, les droits d’enregistrement et de timbre, et les autres impôts et taxes non classées ailleurs.
Au regard des répercussions négatives de la pandémie de coronavirus, les recommandations suivantes sont formulées pour la relance de l’économie camerounaise engagée dans la marche vers son émergence à l’horizon 2035 :
a. Supprimer les charges fiscales ayant une influence négligeable sur la croissance économique afin d’en- courager et de consolider le dévelop- pement des initiatives privées dans le pays. Il s’agit particulièrement des taxes sur les services déterminés et les impôts sur le droit d’exercer une activité professionnelle.
b. Réduire le train de vie de l’Etat en termes de dépenses de fonction- nement et améliorer le niveau des dépenses en capital ou d’investisse- ment.
c. S’inspirer du modèle Rwandais et réduire le taux de l’impôt sur les so- ciétés non pétrolières dans l’optique d’encourager l’augmentation du ni- veau d’investissement des entre- prises formelles. En effet, le Rwanda a réduit de 5% son taux d’imposition sur les sociétés entre 2006 et 2007, passant ainsi de 35% en 2006 contre 30% en 2007. La conséquence di- recte de cette réduction est le boom économique qui s’en est suivi au cours de la dernière décennie.
Conclusion
La dynamique de la politique fiscale camerounaise en 2020 a ralenti du fait d’un choc extérieur inédit et imprévisible : la pandémie de coronavirus. En effet, la mobilisation des recettes budgétaires s’est faite dans un contexte difficile du fait des restrictions sévères sur les activités économiques au moment où les entreprises et les ménages observaient les mesures barrières destinées à freiner la propagation du virus. Les estimations de la Commission
Economique pour l’Afrique montrent que le Cameroun pourrait perdre 4.1% de sa croissance économique en 2020. De ce fait, dans l’optique d’amorcer de manière sereine une reprise en 2021, le Cameroun pourrait actionner directement trois leviers à savoir : la réduction du train de vie de l’Etat, l’amélioration des dépenses en capital ou d’investissement et le soutien sur le plan fiscal aux entreprises formelles.
2
The role of public-private partnerships in the
implementation of online tax payment in Cameroon
By Dinga Tambi Appolinaris
Research Assistant at the Nkafu Policy Institute
Public Private Partnerships (PPP) have been adopted by most countries because of its effectiveness as a means of attaining economic development. While Cameroon since 2010 has been using this approach
in the infrastructure and energy sectors, it is time to widely extend the use of PPP to overcome the challenges of digitalisation and become a digital economy in the context of emergence by 2035
Introduction
Most countries of the world since the early 2000s have adopted a public-private partnership (PPP) approach to facilitate economic development. Public Private Partnerships (PPP) are widely applauded in the facilitation of funding, knowledge transfers and execution of large scale government projects of utmost importance.
Moreover, it is generally perceived that the private sector is more innovative and efficient due to their primary objective of profit maximisation. Consequently, projects that integrate private sector innovation, complemented with public sector incentives are more efficient. Empirical evidence suggests a significant positive macroeconomic contribution of PPPs.
Following on from this, PPPs and especially social and pro-poor infrastructure has an essential role to play in efforts to reduce poverty by improving access to infrastructure and markets [1]. With several development challenges, Cameroon in the past 15 years (2005-2020) has been making efforts to facilitate economic development
using a PPP approach. This can be seen from the adoption of: Law n° 2006 / 012 of the 29th December 2006 stating general regulations of Partnership Contracts[2] , followed by Decree n° 2008/0115/PM of the 24th January 2008 on the enforcement clauses of Law n° 2006/012 of the 09th December 2006 fixing the general regulations of partnership Contracts[3]
. Since 2010, PPP in Cameroon have been most prominent in transport, urban development, energy and the agro-food industry, highways and ports with private partners from countries such as France, South Korea and South Africa [4].
The progress made in projects in the above sectors should be a principal motivation for the extension of PPP to other key sectors of the economy still experiencing major challenges [5]. This is even more important for Cameroon that is expected to become a digital and emerging economy by 2035. Modernization, new technologies, efficiency are indispensable to public sector transformation, improved access
to services across a range of sectors and inclusive economic development, a key anchor to the government’s 2035 development strategy.
However, many of the upgrades and modernization required is not only capital intensive and expensive, but is also complex to manage and outside of the scope and skill-set of most government agencies who lack the dedication and enthusiasm private companies have. This article seeks
to explore the role of PPP today in economic development in Africa, and more specifically how PPP can help in effectively putting in place a digital economy in Cameroon with focus on e-tax systems. This will include sections on the challenges faced by Cameroon in its digitalisation process, recommendation on a way forwards, a case study of Egypt’s strategy and a conclusion.
Challenges faced by Cameroon in its digitalisation process
Today, becoming a digital economy is a source of economic growth, productivity and competitiveness.
It increases competition between domestic firms in the public and private sector, and makes products more competitive in the global market.
Its cross-sectional nature is such that it influences all sectors of the economy; it is also a push factor for recent innovative sectors such as agribusiness and technology.
While, several digitalised sectors in other African countries such as Rwanda, Kenya, Egypt and South Africa [6] have grown increasingly competitive and agile due to the adoption of innovative practices and novel methods of production [7].
Cameroon’s desire to become a digital economy has come across a number
of institutional and regulatory barriers.
Efforts have been made in different public sector services in line with this objective. The most remarkable is the implementation of online filing and payment of taxes in Cameroon. While this is a laudable achievement, it has taken over a decade for Cameroonian tax authorities to adopt e-filing. To an extent, it has simplified the process of paying taxes, improved efficiency amidst operational difficulties and will bolster governance and revenue collection over the long run.
However, according to research findings, there are major challenges making the electronic filing, payment and other online services very ineffective and remotely cumbersome by civil society. Among these challenges are:
• Frequent break down on the e-filing website, because it is unable to support a very large number of users most times.
• Frequent maintenance work and changes on the website without notification has been frustrating to tax administrators and tax payers associated with the shutdown of the website which sometimes persists for two to three weeks.
• The electronic system sometimes causes irregularities due to mal- functions and difficulties visualising the declarations in the system especially as result of internet slow down.
• Unreliable Internet connection is a major challenge for users of this system.
• Frequent power outages are an issue as it disrupts the process of online declaration and causes irregularities.
The above challenges outlined can be largely attributed to the government’s inability to manage the inter-related
services necessary for the effective functioning of the online filing and payment of taxes considering its delicacy.
PPP for an efficient digital tax system
To bridge the current digital divide, and become a digital economy, the government will need assistance from private partners to achieve the fixed targets. It will take a strategic and considered set of PPPs to achieve Cameroons digital economy.
There is urgent need to attract investments in the ICT sectors to have a good number of private companies that can partner with the government to ensure that Cameroon becomes a digital economy.
The government should allocate a greater portion of future investment on digital aspects of the economy as this will form the basis for sustainable access to public services, boost public sector efficiency and reduce the digital divide. Such investments will also reinforce the energy transition towards cleaner sources of energy that are indispensable for citizens in rural areas.
Secondly, digital economies have a huge demand for reliable internet connection.
CAMTEL, a public institution is the principal distributor of internet services in the country. There is little incentive to provide better internet services considering the fact that it is a public institution.
Article 97 of the 2010 electronic Communications Law granted three concession agreements to CAMTEL. It appears that the infrastructure heritage is worryingly overfunded and under-sourced, technically [8] this is an impediment to private sector financing or competition.
There is a need to open up and encourage private investors to invest in internet service delivery in the economy to guarantee availability of internet for a sustainable digital economy. Increase competition will increase efficiency and better service delivery.
Cameroon stands to learn from Egypt’s ICT and E-Government Program. Egypt’s
“subscription Free Internet” in 2002 offered access to Internet at the price of a local phone call. [9] Egypt’s Smart Village project was designed to remove obstacles to ICT firms investing in the Egypt’s ICT sector.
Within two years of its inauguration in 2005,
the Smart Village hosts a growing number of IT companies including multinationals, local and regional enterprises, start-ups, training centres and the Ministry of Information and Communication Technology[10] (MCIT).
The project was a PPP between the MCIT and a private consortium.
Conclusion
PPP’s are indispensable to economic development and can cause sustained economic convergence by enabling greater productivity across a range of sectors and large-scale projects. However, the government is currently unwilling to let private companies into some sectors,
which impedes innovation and places great strain on Cameroon’s economic development. PPP’s can form the basis of sustained economic growth, job creation and productivity across the public and private sector in Cameroon.
NKAFU POLICY INSTITUTE
est un Think Tank au sein de la Fondation qui se concentre sur l’utilisation d’une analyse indépendante pour renseigner les débats publics. Sa mission est de
faire progresser les politiques publiques qui aident tous les Africains à prospérer dans des économies libres, équitables et démocratiques.
L’Institut s’est distingué comme un centre de recherche de premier plan au Cameroun, engagé dans la promotion
d’un débat ouvert qui construit un consensus vers un avenir démocratique.
w w w.nkafu.org
3 Implications of the recent phone tax in Cameroon and key lessons from Rwanda
By Henri Kouam Tamto
Economic Policy Analyst, Nkafu Policy Institute
COVID-19 has disrupted economic activity across Cameroon, denting exports and reducing government revenues in the process. The government imposed a new digital tax that has been reversed following demands from the President of the Republic.
This letter provides a detailed analysis on the implications of this punitive tax on domestic spending, financial inclusion and the adoption of domestic reforms and proposes recommendations, drawing from Rwanda’s experience.
Introduction
The Coronavirus pandemic has caused unprecedented harm to global health and economic systems. Never has this been truer than in Cameroon, whose commodity- linked economy has slowed markedly.
Furthermore, the currency depreciated substantially1, increasing the debt burden and causing deterioration in the terms of trade. For an economy where mineral fuel comprise 45% of exports2, lower external demand and tumbling oil prices have depressed government revenues, whilst exacerbating the pressure of interest payments on external balances.
In other to stem the spread of the virus and reduce the grave humanitarian costs
1. Kouam. H. (2020). Assessing the Economic and Financial Fallout from COVID-19; Implications for Macroprudential Policy. SSRN Electronic Journal.
DOI: 10.2139/ssrn.3603625
2. Kouam. H. (2020). China Sneezes the World Catches a Cold-CEMAC. SSRN Electronic Journal.
DOI: 10.2139/ssrn.3557298
that have accrued to other countries, the government announced a set of containment measures on March 13th3 . These measures, in line with WHO
recommendations, included social distancing measures, e-conferencing for gathering of people above ten and closure of pubs and restaurants at 6PM. Whilst the salience of such measures are well understood in the context of COVID-19, they imposed significant strains on businesses and households during this time, exacerbating the adverse implications of a weaker exchange rate, higher debt burden, lower exports and plummeting external demand for energy products.
As economic activity slowed on the back of containment measures, so did tax revenues, driven by lower import and export duties.
3. Ngute. J. D. (2020). Government Response Strategy to the Coronavirus Pandemic (COVID-19).
The imposition of a phone tax…
On October 15, an additional tax was imposed on cell phones and tablets worth 33% of the initial price. A downpour of outrage on social media and across civil society caused a reversal of the decree. A communiqué from the President called for appropriate mechanisms to be designed instead.
This article delves into the government’s rationale for imposing what some viewed as a punitive tax, the socio-economic costs on society, the implications for economic development and other ways to raise taxes in the digital age.
The Government in dire need of tax revenues.
Cameroon’s macroeconomic backdrop has suffered a great deal from COVID-19, with deteriorating external balances, ballooning deficits, and lower government revenues.
Furthermore, the currency has depreciated due to lower oil prices and falling export revenues.
This has accentuated Cameroon’s public debt currently at 38.5%, even as this remains below CEMAC requirements of 70% of GDP. Before going any further, one should note that Cameroon’s interest
payments rose from 2.1% in 2012 to 5% in 20184.
As a result of a weaker currency, faltering economy, and expensive fiscal measures to lessen the economic impact of the shock of the virus; the government is in need of additional revenues to service its debts.
4. World Bank. (2020). Interest Payments (% of Revenue), Cameroon. International Monetary Fund, Government Finance Statistics Yearbook and data files.
It is now clear why the government needs additional tax revenues;
1. COVID-19 disrupted economic activi- ties, which caused both imports and exports to fall. This caused the govern- ment’s revenues to fall from lower im- port and export duties;
2. Secondly, lower oil prices equally caused the governments’ revenues to fall, more so as oil production capacity is suffering from the negative impact of a fire that occurred back in 2018 at the
national oil refinery.
3. Social distancing meant companies place some staff on technical leave, which reduced the contribution of such tasks to economic activity.
4. The government’s fiscal measures were equally costly and included tax credits, suspensions to social insu- rance contributions, and an increase in the family allowance.
Why a phone tax?
The government has spent a great deal assuaging the economic impact of COVID-19, and while more could be done the lingering impact of the virus on consumption lower exports, ballooning deficits, and a weaker currency created a rationale for the government to raise additional revenues.
Over 5% of the Cameroonian economy is driven by services such as communications, business, and consultancy services as well as transport.
I. A tax on transport will increase the cost of living for citizens.
II. A tax on business services will be counterproductive and could cause a protracted crisis.
III. Any tax on consumption will raise the cost of living and risks increasing the rate of poverty – currently at 38.5%.
The most credible way for the government to raise additional tax revenues is on products that are ubiquitous but affordable for Cameroonians above a certain income.
It is important to note that the average income in Cameroon currently ranges from XAF 116, 000 up to 2 million for the highest earners.
Government tax revenues are exposed to the global business cycle
COVID-19 and structural drivers of Cameroon’s economy have reduced the amount of revenue derived from economic activity. It is important to note that raw materials comprise 69% of Cameroon’s exports, while capital goods, intermediate products, and consumer goods comprise 1.6%, 13%, and 8.3%
(WITS, 2020). As such, when the prices of global commodities fall, the government’s revenues from export duties equally fall.
As a result of the above, the government could not impose extra duties on exports, meanwhile, pharmaceutical products such as respiratory and oxygenators, masks, surgical gowns, and gloves were exempt from additional taxes. This partly explains why the 2020 budget was reduced by 11%5 in other to adjust
5. Journal du Cameroun. (2020). Coronavirus:
public finances to lower tax receipts from exports and domestic economic activity6. Findings from a number7 of researchers8 show that exports will fall as a result of COVID-19, while a weaker currency will constrain domestic expenditure as households prioritize spending on basic necessities and pharmaceutical products.
As such, the decision to increase taxes on cell phones is economically punitive and holds grave implications for economic development.
6. Ministère des Finance. (2020). La situation sur l’exécution budgétaire à la fin premier semestre 2020 est disponible. Direction General du Budget 7. Mua. K. and Kouam. H. (2020). China Sneezes the World Catches a Cold-CEMAC.
SSRN Electronic Journal. Project: COVID-19 Se- ries: Monetary and Economic Policy in a Post-CO- VID World. DOI: 10.2139/ssrn.3557298
8. Kum. V. and Kouam. H. (2020). Socio-Econo- mic Implications of Covid-19 In Cameroon. Nkafu
A Jupeterian phone tax will reduce financial inclusion and reverse development Gains
Firstly, a phone tax will reduce domestic spending as households will be forced to pay higher prices over the long run. As such, other sectors such as recreation and leisure stand to lose out from such a tax. While the phone levy will increase the government’s tax revenues, it will reduce the contribution of domestic consumption to overall GDP over the long run.
An additional tax on cellular phones and tablets will reduce financial inclusion even as significant gains have been made over the last decade. The number of Mobile Money users currently stands at 30%9 , with only 83 bank accounts for every 1000 adults. An additional premium on cell phones will further widen the digital divide and impoverish farmers and individuals in the informal sectors that rely on Mobile Money transfers as a means of payment.
There are no cheaper alternatives to imported phones and the nearest substitutes include the Mara X and Mara Z from Rwanda. As such, additional taxes on mobile phones will not cause consumers to
9. Investor au Cameroun. (2020). Orange reven- dique 4,5 millions de clients Mobile Money contre plus de 5 millions pour son concurrent MTN.
buy African versions of smartphones. For every 100 people, 82 own a mobile cellular subscription according to World Bank data10. Making cell phones expensive will have a great impact on their ability to consume information, trade, and access financial services. This equally risks imperilling development gains that have seen a greater number of people come online for a range of economic and social activities.
Finally, a tax on portable communication tools risks impeding the adoption of government reforms across society. An example includes e-filing and the obtention of a unique reference number for declaring taxes and opening bank accounts. Such reforms are only possible if people have access to affordable smartphones. There is a clear rationale for policymakers to rethink other avenues to raise revenues, which include but are not limited to charging tech companies for consumer data as well as the storage of citizen’s data outside of Cameroon.
10. International Telecommunication Union.
(2020). Mobile cellular suscriptions (per 100people). World Bank Group.
Lessons from Rwanda 2011 – 2015
It is equally important to note that Rwanda scrapped import duties11 on phones and the law was revised in 2015 to remove import tax. This was designed to improve access to smartphones and support the government’s efforts to digitize the delivery
11. TRT World. (2020). Tech firm pits Afri-
can-made smartphones against Chinese mobiles in Rwanda
of public services such as land registration and tax filing. Decision-makers should refrain from imposing punitive on tech products; they should rather promote the adoption of smartphones and tablets to improve access to public services, boost financial inclusion, and reduce the digital divide.
Fiscal Decentralization and Fiscal Policy in Cameroon
By Dr Vera Kum
Fellow in Economic Affairs at the Nkafu Policy Institute
This paper seeks to explore the relationship between fiscal decentralization and fiscal policy in Cameroon. To this effect, it is important to note that, fiscal decentralization is all about the central government’s passing of budgetary authority to elected sub national governments in the form of the power to make taxing and spending decisions (Bahl, 2008) and this to a large extent has some effects on Fiscal policy.
Fiscal policy is a means by which a
government adjusts its spending levels and tax rates to monitor and influence a nation’s economy. Based on research findings, we notice that, fiscal decentralization leads to fiscal discipline. This implies that through fiscal decentralization, government is able to maintain fiscal positions that are consistent with macroeconomic stability and sustained economic growth. Hence there is need for proper accountability and transparency with public funds.
Introduction
In recent years, decentralization has pro- ven to be a more progressive, efficient, and effective mode of governance across the world. Decentralization in Cameroon is an instrument to meet multiple objec- tives (World Bank, 2012). Cameroon’s Constitutional Law of 18 January 1996 en- shrined decentralization as a fundamental principle of the organization of state go- vernance and subsequent implementing legislation that affirms the central govern- ment’s commitment to transferring a range of powers to local authorities to streamline decision making to the local level. Local and regional authorities are indispensable to the implementation of public policies at the local level. Their autonomy in financial and administrative matters is a necessary condition for achieving local development objectives. Hence, decentralization in its
multi facets is a major feature of Came- roon’s political landscape, with four main types (White, 2011). Amongst them, fiscal decentralization tends to be our main point of focus for this article. Fiscal decentraliza- tion is all about the central government’s passing of budgetary authority to elected sub national governments in the form of the power to make taxing and spending decisions (Bahl, 2008). Fiscal policy on the other hand refers to the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy.
The objective of this paper is to analyze the impact of fiscal decentralization on fis- cal policy in Cameroon. The paper also ex- ploits the emerging trend of fiscal decen- tralization and its applicability.
4
Emerging Trend of fiscal decentralization
Although many developing countries are likely to remain fairly centralized, a few nations have collectively generated a growing interest in developing the local
government (World Bank, 2000). This growing interest in fiscal decentralization can be attributed to the following:
1. Economic planning by the central government has not been successful in promoting adequate development.
Despite the strong economic performance in developing world in the past, many countries have faced a variety of economic problems that central governments have been unable to resolve.
2. Changing international economic conditions and structural adjustment programs designed to improve public sector performance have created serious fiscal difficulties for developing countries. Growing service demands and poor economic performance resulting
to budget deficits, financed mainly by external borrowing. Thus, government’s attempt to reduce its intervention in the economy calls for decentralization.
3. Changing political climates also encourage the development of local governments in developing countries including Cameroon. With increase education and access to better information, people are aware of the pitfalls of centralization, thus they desire to bring the control of government functions closer to themselves.
The Trend of Fiscal Decentralization in Cameroon
The 1996 constitution of Cameroon laid down the frame work for the process of decentralization in Cameroon. To this effect, the name of the country was change from a unitary state to a decentralized unitary state. Also it was indicated that regions and local authorities shall comprise of regions and councils headed by regional delegates and mayors respectively. Such local representatives are to be elected by municipal councilors (Cheka, 2010).
To further accelerate the decentralization process, the decentralization law of 2004 set the pattern of the exercise of power by local authorities which represents the frame work for governance and democratic practices. Local authorities were given
financial and administrative autonomy.
In 2008, there was a change of name from provinces to regions. This was to put in place implementation strategies.
To further accelerate the decentralization process, the Centre de Formation Pour L’Administration Municipale (CEFAM) which was created to a train local government officials and staff was changed to national school of local administrators (NASLA) In 2020, regional elections were held for effective implementation of the decentralization process.
The trends as stated above is to ensure decentralization is fully implemented in Cameroon
Applicability of fiscal decentralization in Cameroon
Fiscal decentralization takes three major forms:
1. Assignment of expenditure and responsi- bilities to sub-national governments. This involves the allocation of public functions and responsibilities to sub-national units.
For example, the building of schools and constructions of roads amongst others.
2. Assignment of tax and revenue powers to sub-national units to meet expected ex- penditure. The local government has the
responsibility to tax economic activities within regions and municipalities.
3. Assigning revenue sources, central go- vernments may provide regional and local governments with additional resources through a system of intergovernmental fis- cal transfers. The case of Fonds Spécial d’Equipement et d’Intervention Intercom- munale (FEICOM) in Cameroon.
Effects of fiscal decentralization on fiscal policy
The impact of fiscal decentralization on fiscal policy is ambiguous from varied views.
1. Fiscal decentralization can improve the fiscal balance if public goods and services are made available at lower costs. Executors are closer to final beneficiaries ensuring accountability and thus pressures on local governments to improve provision of public goods while minimizing costs.
2. Fiscal decentralization promotes productive efficiency, reduce public expenditures and improve the fiscal balance. According to Sow and Razafimahefa (2015), fiscal decentralization can improve the efficiency of public service delivery if some specific conditions are met.
3. Fiscal decentralization leads to fiscal discipline. This implies that through fiscal decentralization, government is able to maintain fiscal positions that are consistent with macroeconomic stability and sustained economic growth. Baskaran (2010) shows that more devolution of spending authority to local governments tends to motivate sound fiscal policies and reduces public indebtedness.
4. Fiscal decentralization enables local governments to better match the preference of the local population thus containing expenditures. Local governments possess better access to local preferences and consequently, have an informational advantage over the central government in deciding which provision of goods and services would best satisfy citizens (Hayek, 1945;
Tiebout, 1956; Musgrave, 1969).
5. Fiscal decentralization encourages competition across local governments and thus foster cost-effectiveness.
Competition among local governments attract tax base, for instance by reducing local tax rates, and to search for innovative techniques to produce and provide public goods with limited resources. This competition enhances cost-effectiveness and reduces waste and corruption (Brennan and Buchanan, 1980).
Consumers of public goods can move across jurisdictions where their needs are met, forcing local governments to improve efficiency of fiscal management (Tiebout, 1956).
Negative effects of fiscal decentralization on fiscal policy
1. Subnational governments may expect their financing gap to be bailed-out by central governments, leading to a soft budget constraint and a deterioration of the fiscal ba- lance (Rodden et. al, 2003).
2. Local governments’ dependency on transfers can worsen the general government’s fiscal balance. Higher reliance on transfers, particularly wit- hout debt limits, can worsen the ove- rall balance (Rodden, 2002). Trans- fer-funded subnational expenditures can also become supplements to central government expenditures (Fornasari at al., 2000). Transfers may become a vicious cycle, with higher transfer-dependency leading to larger local government’s deficits
and requiring larger transfers (De Mello, 2007).
3. Decentralization can create unne- cessary multiplication or overlap- ping of administrative procedures, due to shared competences across different territorial levels of adminis- tration over the same government function and unclear division of res- ponsibilities among them.
4. Fiscal decentralization can lead to misuse of public funds (Prud’homme, 1995); the closeness of subnational policy-makers to subnational inte- rest groups can make the former more sensitive than national poli- cy-makers to lobbying for increased expenditures.
Recommendations
Fiscal decentralization is an effective tool for development agenda of any nation most especially developing countries
like Cameroon. To ensure its benefits are fully ascertained, the following measures are recommended:
1. Local governments should be given full financial autonomy for the execu- tion of their projects.
2. Expenditures at subnational levels should be geared toward meeting the basic needs of the local popu- lation.
3. There should be proper accountabi- lity and transparency by subnational
authorities
4. The central government should put in place a proper control mecha- nism to monitor execution of pro- jects at sub national level.
5. Election and appointment of sub- national representative should be based on competencies.
Conclusion
Fiscal decentralization contributes to effective provision of services, mainly by the fact that expenditures correspond more to local priorities and preferences, which motivate local governments to improve mobility of resources, hence increase transparency and responsibility for expenditures. Fiscal decentralization can be regarded as a crucial element of decentralization of public administration, based on the idea that providing public goods
and services at the local level is more efficient and economical (Blöchliger and King, 2006; Governatori and Yim, 2012; Neyapti, 2010). According to Stiglitz (1980), decentralized provision of public goods and services is associated with quality. Thus, it is vital for the government of Cameroon to implement effective decentralization so as to meet its aspiration of growth and a better life for all Cameroonians.
References
Rodden, J., G. Eskeland, and J.
Litwack. 2003. Fiscal Decentralization and the Challenge of Hard Budget Constraints. Cambridge, MA:
Massachusetts Institute of Technology Press.
Hayek, F.A 1945: The use of knowledge in society. American Economic Review. 45. pp.519-530 Tiebout, C. (1956), “A pure theory of local expenditures”, Journal of Political Economy, 64(5), 416-424.
Brennan, G. and J. Buchanan.
1980. The Power to Tax: Analytical Foundations of a Fiscal Constitution.
Cambridge, UK: Cambridge University Press.
Bahl, Roy (2008) “Opportunities and
Risks of Fiscal Decentralization: A Developing Country Perspective” in Achieving Decentralization Objectives ed. By Gregory Ingram (Cambridge, Mass: Lincoln Institute of Land Policy), pp 19-37.
Fornasari, F., S. Webb, and Hozou 2000, “The Macroeconomic Impact of Decentralized Spending and Deficit;
International Evidence”, Annals of Economics and Science (U.S), Vol.2, PP. 403-33.
Musgrave, R. The Theory of Public Finance, McGraw Hill, New York, 1969 Prud’Homme, R. (1995), “The dangers of decentralization”, World Bank Research Observer, 10, 201-220.
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The Small Business and Entrepreneurship Center (SBEC) focuses on equipping entrepreneurs and small business owners with organizational and business management skills to promote free enterprise. And thus, boosts Cameroon’s socio-economic development through the provision of basic technical support tools needed to establish, expand, and sustain small businesses in the private sector
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La politique fiscale post Covid-19 au Cameroun : Quelle place pour l’équité intergénérationnelle ?
Par Dr. Jean Cedric Kouam
Chef de la sous-section politiques fiscale et monétaire au Nkafu Policy Institute
Face aux répercussions économiques et sociales de la pandémie à coronavirus, le gouvernement camerounais a pris une série de mesures fiscales afin de soutenir les activités des ménages et entreprises en difficulté. Au regard des prévisions budgétaires contenues dans la Stratégie Nationale de Developpement 2020-2030, il est évident qu’en l’absence des décisions visant à renforcer le tissu entrepreneurial,
l’ensemble de ces mesures d’exonération fiscales combinées à la dette publique de plus en plus importante pèseront davantage sur les générations futures.
D’où la nécessité pour le Gouvernement de faciliter la création des entreprises citoyennes et durables en vue de restaurer l’équité intergénérationnelle en matière de paiement d’impôt.
Introduction
Depuis le 6 mars 2020, le Cameroun fait face aux répercussions économiques et sociales de la pandémie liée à la propagation du nouveau coronavirus (Covid-19). Parmi les principales décisions prises par les gouvernements pour contrer les effets de la pandémie, les mesures fiscales figurent effectivement en bonne place dans le dispositif de soutien aux entreprises et aux ménages. Entre autres mesures, l’on note par exemple, l’allocation d’une enveloppe spéciale de 25 milliards de F.CFA12 pour l’apurement des crédits de TVA13 en attente de remboursement,
12. Franc de la Coopération Financière en Afrique
13. Taxe sur la Valeur Ajoutée
près de 75% d’abattements substantiels sur les arriérés d’impôts des entreprises (notamment ceux enregistrés depuis le 31 décembre 2018) et plusieurs exonérations de taxe et report de paiement (DGI, 2020).
L’ensemble de ces réformes fiscales, certes indispensables pour éviter la chute ou la faillite de certaines entreprises, ne sont pas sans coûts pour le gouvernement.
Le montant de l’enveloppe accordé aux entreprises constitue en effet un manque à gagner pour les recettes budgétaires.
Combiné à la dette publique de plus en plus élevée, ce déficit fiscal pourrait constituer une charge pour les générations futures.
5
Une réponse gouvernementale principalement axée sur des mesures d’exonérations de taxe
et report de paiement
Le gouvernement a pris une série d’initiative visant à soutenir l’économie affectée par la crise sanitaire en 2020. Dans un communiqué rendu public le 30 avril, le Premier Ministre a annoncé la décision du Président de la République, d’appliquer des mesures d’assouplissement, afin de soulager les secteurs durement impactés par cette crise sanitaire. Dans ce cadre, un ensemble de balises d’encadrements fiscaux ont été annoncé pour soutenir les activités des entreprises et des ménages.
Des 19 mesures d’assouplissement annoncées pour faire face aux répercussions économiques et sociales de la pandémie, une dizaine d’entre elles sont d’ordre fiscal. Selon le Directeur Général des impôts, ces mesures fiscales de soutien sont estimées à près de 114
milliards de F.CFA en 2020 soit 92 milliards au titre des recettes internes et 22 milliards au titre des recettes douanières.
Pour concrétiser les différentes actions annoncées, l’Etat a modifié la loi de finances initialement adoptée le 24 décembre 2019, révisant à la baisse l’ensemble des prévisions fiscales. Celles- ci évaluées à 2374.9 milliards de F.CFA avant la crise se situeront désormais à 2302.8 milliards de F.CFA soit une baisse de 3.03% (Loi de Finances Rectificative du 03 Juin 2020). Celles-ci avaient été fixées sur la base d’un taux de croissance du PIB réel de 4% et d’un déflateur du PIB de 1.4%, soit un taux de croissance du PIB nominal de 5.4% avec le cours du baril projeté à 50 dollars.
Charge fiscale et générations futures : la nécessité de promouvoir la libre entreprise
Les objectifs fixés par le Gouvernement dans la Stratégie Nationale de Développement 2020-2030 (SND30) confirme l’optimisme du gouvernement après un exercice budgétaire 2020 assez éprouvant. Selon ce nouveau programme gouvernemental, la pression fiscale au Cameroun devrait augmenter de 0.2%
en 2021 (12.3% du PIB en 2021 contre 12.1% en 2020). Concrètement, cela veut dire que les entreprises et les ménages du Cameroun, soulagés en 2020 en raison de la crise sanitaire, devraient payer un plus d’impôts en 2021. Selon la même source, les recettes fiscales (en % du PIB)
devraient augmenter un peu plus vite à partir de 2021 pour se situer à 15.4% en 2030, soit une augmentation de 3.3 points de pourcentage par rapport à 2020.
Le système fiscal camerounais n’étant pas basé sur des paiements forfaitaires et obligatoires et donc conçu de sorte qu’on ne paie qu’après avoir réalisé un chiffre d’affaires, la bonne question est celle de savoir d’où proviendra ces recettes. En effet, compte tenu de la crise sanitaire, de nombreuses entreprises en difficultés peuvent avoir du mal à redresser la pente et donc à honorer convenablement leurs engagements fiscaux demain.
Pour financer l’ensemble de ses dépenses en 2020 (paiement des salaires, dépenses sécuritaires, reconstruction des régions du Nord-Ouest et du Sud-Ouest, service de la dette, grands projets d’infrastructures, etc.), la dette a connu une croissance remarquable. Au 30 septembre 2020, la dette publique camerounaise (emprunt public émis par le Trésor ainsi que les engagements financiers à l’égard des citoyens à l’instar des pensions-retraite) se chiffrait à 10 164 milliards de FCFA, soit 45,8% du PIB (CAA), dont une augmentation de 1,3% en glissement mensuel contre une baisse de 0,1% en glissement trimestriel et une hausse de 5,7% par rapport à décembre 2019. Si on s’en tient à ce rythme de croissance de la dette, celle-ci pourrait se situer à près de 47% du PIB au 31 décembre 2020 (contre 38,3% du PIB au 31 décembre
2019). Le remboursement du montant de l’encours ainsi que du service de la dette est principalement financé à partir des prélèvements fiscaux auprès des ménages et des entreprises.
Outre le recours à l’endettement, un autre moyen pour l’Etat de financer son déficit budgétaire est de taxer un peu plus les entreprises (prélèvements fiscaux). Dans un contexte marqué par le ralentissement de l’activité économique en raison de la crise sanitaire et, en observant les multiples exonérations fiscales enregistrées au cours de l’exercice 2020, il ne fait aucun doute qu’une bonne partie de la dette fiscale sera supportée par le contribuable de demain ; l’impôt différé apparaissant comme un transfert de pouvoir d’achat de la génération future vers la génération actuelle. En l’absence de la mise en œuvre Figure 1 : Evolution des recettes fiscales (en % du PIB) entre 2017 et 2030
Source : SND2020-2030
des politiques visant à élargir l’assiette fiscale, tout report de paiement d’impôts ou de taxe est une action à horizon économique dangereux et injuste pour nos enfants.
Dans la mise en œuvre de sa Stratégie Nationale de Developpement pour les dix prochaines annees, le Gouvernement du Cameroun devra penser à l’équité intergénérationnelle en ce qui concerne le paiement de
ses dettes. Ceci passe notamment par des mesures et politiques visant à promouvoir la libre entreprise . Des recettes fiscales supplémentaires au travers de la multiplication des entreprises citoyennes, durables et responsables seraient plus productives.
Une des conséquences serait la restauration de l’équilibre fiscal entre les générations.
Conclusion et recommandations de politique économique
En somme, il ne fait aucun doute que l’économie camerounaise, la plus diversifiée de la CEMAC a les moyens suffisants pour renforcer sa résilience notamment en redressant la pente de ses prélèvements fiscaux.
Toutefois, ceci reste conditionnée par la mise en œuvre d’un ensemble de mesures visant notamment à élargir son assiette fiscale. Entre autres mesures, il est nécessaire de : (i) Densifier la coopération multilatérale
pour une mobilisation de plus de moyens financiers et de l’expertise technique permettant d’améliorer les performances des PME et des TPE ; (2) Faciliter davantage les procédures de création d’entreprises de manière à encourager la libre entreprise et faciliter la libre concurrence ; (3) Alléger les charges fiscales des entreprises notamment celles engagées dans la promotion du « Made in Cameroon ».
Kouam, J.C., Kum, V., D’Pola, K.U., Kouam, H., Dinga T., (2020)
« Quelle politique fiscale au Cameroun après 2020 ? »,
Lettre de politique fiscale, Nkafu Policy Institute, Denis & Lenora Foretia Foundation, Décembre 2020, 1ére édition.
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