Zambia hints at fifth telco operator

A fifth telco
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Enough room says
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Monday, Feb 24th

Cameroon slaps VAT on e-commerce trade

Cameroon slaps VAT on e-commerce trade

The sale of goods and services in Cameroon via local or foreign e-commerce platforms will be liable to Value-Added Tax (VAT) of 19.25%.

This is according to recently introduced legislation, the 2020 Finance Law of Cameroon which came into effect in late 2019.

According to the new legislation, operators of e-commerce platforms, on behalf of suppliers, will have to calculate, declare and pay VAT due on the sale of goods and services. Operators will also have to declare and pay VAT on commissions received through sales on these platforms.

While local tax experts fear a lack of infrastructure and technical expertise could hamper government's efforts to secure tax revenue, the Directorate General of Taxation is yet to explain the practicalities around compliance.

Based on researched conducted in 2017 by Astrid Amalia Suntoro and Christine Tjen of Universitas Indonesia, identifying taxpayers engaged in e-commerce is a major challenge in successfully implementing VAT on e-commerce transactions.

The researchers also cite incompleteness of records, determining taxpayer's jurisdiction, identifying electronic and physical products, lack of audit trails, and lack of system controls as other challenges.

The Cameroon market, which is characterised by underdeveloped logistics and transport infrastructure, has proven difficult for e-commerce operators.

Though the country has witnessed an increase in mobile phone and internet penetration in recent years, operators have struggled to secure a foothold, with the likes of Jumia and Africmarket exiting the market.

E-commerce platform operators have often expressed frustration over delays in customs clearance. In addition, the central African sub-region continues to experience macro-economic instability due mainly to a drop in global commodity prices, insecurity and an ongoing humanitarian crisis.

The country's Minister of Finance Louis Paul Motaze officially marked the beginning of the 2020 financial year on 13 January 2020 in the city of Bafoussam.


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