Part 6 of this paper concludes the discussion of the tax reform of non-professional activities and the reorganization of certain taxes.
Last month was devoted to the presentation of the innovations of the new 2022 Finance Law in Cameroon. This discussion focused on examining the tax measures put in place to broaden the tax base, thereby improving the business climate in Cameroon. Parts 1 and 2 of this paper introduced the new 2022 Finance Law and summarized the regulatory framework of the law and its effect on the tax system in certain business sectors such as the oil sector, shipping companies, financial companies, and the agricultural sector. Part 3 continued with a discussion of the general measures that have been introduced by the new finance law. These measures include the institution of the new tax on money transfers. Parts 4 and 5 of the paper discussed the tax measures related to import and export operations. The reform of the taxation of non-professional activities. Part 6 of this paper concludes the discussion of the tax reform of non-professional activities and the reorganization of certain taxes.
Under the new finance law, non-profit organizations are exempt from corporate income tax, patent, and property tax; they are, however, liable, per the provisions of Articles 125 et seq. of the general tax code and subject to the exemptions provided for, for
- The value-added tax ("VAT"): This VAT applies to contributions, commonly known as "tontines" and other financial products in social meetings, for example; the rental of rooms and accessories for cultural events; it should be noted that the sums collected are supposed to be inclusive of tax. Solidarity savings consists in collecting the savings of its members and giving them at the end of a period. This cannot be taxed, because as it is simple savings (salary or income from a business activity that has already been taxed)The amount taxed must have a commercial connotation within the association.
- Tax on income from financial products of investments, to be paid to members, at the rate of 16.5% including CAC.
- Registration fees for certain acts
With the taxing of non-profit organizations, they are now required to register with the tax center closest to their location, keep accounts of operations related to their commercial activities, make monthly declarations, and produce at the end of the year statistical and fiscal declaration (DSF) according to the model provided by the tax authorities.
The taxation operations are now also extended to:
- Public and religious health science institutions: To broaden the tax base and mobilize more non-oil revenues, the legislator has removed the exemption from VAT payment enjoyed by these institutions. Indeed, since it has been found that these establishments carry out operations with a commercial connotation, they are now required to pay VAT on operations such as accommodation in hospitals, catering, school fees, sale of uniforms, etc...
- Land transactions: Within the framework of taxes on land income, the legislator provides for an increase from 5% to 11% in the rate of these taxes when they are not subject to withholding taxes. In this sector, and to encourage taxpayers to be fiscally responsible, the administration has provided a tax amnesty for taxpayers who will spontaneously regularize their property taxes until December 31, 2022.
- The inheritance tax: the Finance Act 2022 has just reorganized this tax to encourage taxpayers to declare their inheritance. These adjustments concern the rates applied, which will be revised downwards in 2022. Thus:
For estates from 0 to 2,000,000: 2%.
For estates from 2,000,001 to 5,000,000: 3%.
For estates over 5,000,000: 5%.
To encourage taxpayers to be civic-minded, the tax authorities have provided for the year 2022, an exemption from penalties for spontaneous regularizations of inheritance tax made during the year 2022.
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