Tax Administration Measures in Cameroon to Address the Digital Economy/NJIKAM KPOUMIE ABDELAZIZ

Tax Administration Measures in Cameroon to Address the Digital Economy

NJIKAM KPOUMIE ABDELAZIZ

I. Introduction

The digital economy, characterized by e-commerce, digital services, and online

platforms, is rapidly expanding in Cameroon. This growth presents significant

challenges for tax administration, particularly in revenue collection and compliance.

This paper explores the measures implemented by the Cameroon tax administration

to adapt to this evolving landscape, focusing on value-added tax (VAT) collection,

the digitalization of tax processes, and the regulatory framework governing digital

transactions.

II. Background

a. The Digital Economy in Cameroon

Cameroon's digital economy has been on the rise, driven by increased internet

penetration and mobile technology. As of 2021, internet access reached

approximately 50%, creating a fertile ground for e-commerce and digital services.

However, this growth has also exposed challenges related to tax compliance and

revenue collection, particularly as many digital transactions occur outside the

traditional tax framework.

b. Tax Administration in Cameroon

The Direction Générale des Impôts (DGI) is responsible for tax collection and

enforcement under the General Tax Code. Historically, the tax system has focused

on formal economic activities, leaving a significant portion of the digital economy

untaxed. This gap has prompted the need for reforms to ensure that all economic

activities contribute to national revenue.

III. Measures Implemented by the Cameroon Tax Administration

a. Digitalization of Tax Processes

To enhance compliance and efficiency, the Cameroon tax administration has made

significant strides in digitizing tax processes. The introduction of the “Fiscalis”

platform allows businesses to file tax returns and make payments electronically.

This system reduces the administrative burden on taxpayers and improves the

accuracy of tax reporting. Additionally, mobile payment solutions have been

explored to facilitate tax payments for small and medium-sized enterprises (SMEs),

particularly in rural areas.

b. Capacity Building and Training

Recognizing the need for businesses to adapt to digital tax compliance, the

Cameroon tax administration has initiated capacity-building programs. These

programs aim to educate businesses about their tax obligations in the digital

economy and provide training on effectively using digital tax platforms. By

empowering businesses with knowledge and tools, the government seeks to

enhance voluntary compliance and reduce tax evasion.

IV. Evaluation of Effectiveness

a. Compliance Rates

Preliminary data suggests that the measures implemented have led to increased

compliance among digital businesses. However, challenges remain, particularly in

enforcing compliance among non-resident operators who may not have a physical

presence in Cameroon. The effectiveness of VAT collection on digital transactions

depends on the tax administration's ability to monitor and enforce compliance.

b. Administrative Capacity

The success of digitalization efforts relies heavily on the administrative capacity of

the tax authority. While the introduction of digital platforms has streamlined

processes, the DGI must continue to invest in technology and training for its staff to

ensure effective implementation and support for taxpayers.

V. Challenges and Areas for Improvement

Despite the progress made, several challenges persist. Infrastructure limitations,

particularly in rural areas, hinder the widespread adoption of digital tax solutions.

The regulatory framework governing digital transactions requires continuous

evaluation to adapt to new business models and technologies. Furthermore,

international cooperation is crucial for addressing cross-border tax challenges in the

global digital economy.

VI. Conclusion

The measures implemented by the Cameroon tax administration to address the

digital economy represent a significant step toward modernizing tax practices and

ensuring that all economic activities contribute to national revenue. While progress

has been made in VAT collection, digitalization of tax processes, and capacity

building, ongoing attention and adaptation are required to overcome existing

challenges. By investing in infrastructure, enhancing public awareness, and

fostering international cooperation, Cameroon can create a more equitable and

efficient tax system that supports the growth of its digital economy.