Amongst these measures are the easing of tax burdens, and broad support for businesses and individuals with cash flow problems, difficulties in meeting tax reporting or payment obligations, or otherwise facing hardship.
These courses of action are focused on the collection of direct and indirect taxes, the extension of deadlines for filing tax returns without generating interest or penalties, or the suspension of tax prepayments.
They mostly apply to corporate and individual income and withholding tax returns, periodic VAT returns or social security contributions, and, to a lesser extent, to customs or stamp and excise duties.
The government has tried to resolve these issues by providing these tax and customs measures below:
I. Suspension of accounting verifications for the second quarter of 2020
The government has taken the decision to suspend all General Accounting Audits for Q2 2020. The only caveat for this is cases where there is a suspicion of tax evasion or fraud. In order for this measure to be accurately implemented, the procedures regarding the scope of suspension and the exceptions are
a. Scope of Suspension
The suspension of accounting audits covers the second quarter of fiscal year 2020, which is the period from April 1st to June 30th, 2020. During this period, no general or partial verification of the accounts and in general, no on-the-spot intervention shall be undertaken, all ongoing control procedures shall equally be suspended.
This suspension of accounting verifications and on-the-spot interventions are granted to both the administration and taxpayers.
However, it should be noted that the suspension does not apply in a case where the work in the business is completed and the tax payer has made his comments already, following the notification of adjustments. In a case like this, the services are entitled to notify any taxes that may be recalled.
b. Exceptions to the Suspension of on-site interventions
The suspension of general audit or other on-the-spot checks shall not apply where there is suspicious behaviour displayed by the taxpayer. This includes any behaviour giving rise to a presumption of fraudulent practice aimed at evading payment of tax or reducing the amount of tax.
Regarding the validation of VAT credits, in particular in cases which require prior general checks, in accordance with the provisions of Article 149a of the General Tax Code, or when the business so requests.
For interventions carried out at the taxpayer’s request, the taxpayer must guarantee compliance with the barrier measures necessary to protect all participants in the procedure.II. Extension of the deadline for filing statistical and fiscal declarations without penalties in case of payment of the corresponding balance.
The deadline for the filing of Annual Statistical Returns (DSF) at the taxpayer’s request may be extended without giving rise to any assessment.
III. Suspension of the application of recovery measures for companies directly affected by the crisis.
Companies directly affected by the Covid-19 pandemic can benefit from tax deferrals and moratoria upon request. This measure is applicable to the following companies:
Subject to the ordinary law moratorium provided for in Article L141 of the GTC, only undertakings in the sectors directly affected will benefit from the deferrals and moratoria due to Covid-19.
The moratorium granted to companies affected by the crisis entitles them to the issue of a certificate of non-indebtedness (Attestation de Non Redevance) valid for one month, in accordance with the provisions of Article L94 of the Book of Tax Procedures.
Non-compliance with a payment deadline shall automatically render the moratorium or deferral null and void and shall result in the immediate reactivation of the collection measures forced by the tax collector.
Methods of Implementation
To benefit from the moratorium or a deferment of payment, an application must be made to the Director General of Taxes. These applications must comply with the conditions as stipulated in the circular No. 20/169/CF specifying the modalities of application of the fiscal measures to respond to Covid-19.
Companies must provide supporting evidence of the impact of the health crisis on the company’s financial situation, where the company does not fall within the above-mentioned sectors. Requests for a moratorium or deferment shall be processed within 72 hours, except where it requires a prior working session
IV. Support to enterprises’ cash flow through the special allocation of FCFA 25bn, for the clearance of stocks of tax credits on the Value Added Tax awaiting reimbursement
In order to support companies’ cash flow, a special fund of FCFA25bn is allocated to the reimbursement of VAT credits.
It should be noted that the competent services of the Directorate General of Taxes shall take the necessary steps to credit up to this amount to the escrow account dedicated to the reimbursement of VAT credits housed at the Central Bank (BEAC).
In addition, the operational tax departments will have to speed up the validation controls of those VAT credits that are still at their level and ensure that the corresponding files are forwarded to the division in charge of litigation at the General Tax Department for further processing
V. Postponement of the Property Tax deadline for the 2020 fiscal year to September 30th, 2020
The deadline for payment of the property tax which is usually set at June 30th each fiscal year, as stipulated by article 579(1) of the GTC, is extended to September 30th, 2020.
Notwithstanding the postponement of the due date of the Property Tax, the distribution of pre-completed returns serving as a medium for payment of this tax will be able to begin as early as this month of June. The terms and conditions for the issue and payment of this tax remain unchanged
VI. Full deductibility of donations and gifts on the Corporate Income Tax (CIT) for companies who donate against Covid-19
The aim of this measure is to encourage companies to support in the fight against Covid-19 in Cameroon and give them the possibility to benefit from full deductibility of these expenses on their Corporate Income Tax.
Donations and gifts granted to the state or its branches within the framework of the fight against Covid-19 are fully deductible without any limitations.
With regard to donations made to other organisations, their deductibility remains governed by the provisions of Article A-5 of the General Tax Code. This measure will be taken will be taken into account in the annual declarations of company results.
VII. Exemption from Hotel Tax for the remainder of the 2020 fiscal year
Accommodation establishments, whether classified or not, are exempt from hotel tax for the last three quarters of the 2020 financial year. Accommodation establishments, which are legally liable for this tax, no longer have to include the said tax in the invoices sent to their customers for the period in question.
Other additional and custom measures are: Exemption from Custom duties on all acquisitions of equipment, consumables and provision of services linked to the fight against Covid-19, benefit from direct pickup, hoist pickup or pre-arrival declaration procedures for relief or humanitarian shipments and reduction of the requirement of certain commercial documents and procedures.
RVC exemption, Acceptance of the documentation transmitted electronically (copies) in place of the originals subject to regularization if necessary, acceptance of electronic invoices are also part of the measures.
Also, acceptance of copies of EUR1 movement certificate for the application of EPA tariff preferences, acceptance of the system receipt in place of the original signed by the recipient subject to regularization, Suspension of the collection of interest for late payment of customs duties and taxes.
Suspension for the period of three months of the payment of parking and demurrage charges in the Douala and Kribi ports for essential goods.
The impact that these measures will have are majorly on the state treausury. The idea is to contain the economy and protect its people and their interests, by cohesively adopting such fiscal measures that support trade and industry, and ensure economic stability.
The interpretation and enforcement of these new measures could easily be the subject of controversy, and this may be rendered more challenging by the fact that some of the provisions of the General Tax Code are not exactly straightforward.