Cameroon's local taxation law, introduced in 2024, is expected to significantly increase revenues for Decentralized Territorial Collectivities (CTDs), which include municipalities and regions. This will come at the expense of the central treasury. According to data from the Ministry of Finance's 2026-2028 Medium-Term Economic and Budgetary Programming Document, projected losses for the central government's coffers are estimated at CFA 150 billion in 2027 and 2028.
"The entry into force in 2026 of the local taxation law will lead to a significant revenue decline for the state budget amounting to CFA 100 billion (0.3% of GDP) in 2026, and CFA 150 billion (0.4% of GDP) in 2027 and 2028," the ministry stated in the report. The same source noted this situation could cause "deviations in projections for non-oil domestic revenues."
Promulgated by the President on March 23, 2024, after parliamentary adoption, the local taxation law introduces, among other measures, the flat-rate General Synthetic Tax (IGS). The IGS applies to businesses with annual revenues below CFA 50 million. The government expects this tax, which replaces the existing lump-sum tax and the simplified tax regime, to generate an additional CFA 50 billion per year for the CTDs.
The law also extends the collection of "additional municipal taxes" to excise duties, the special income tax, and public procurement registration fees. This measure is projected to bring in an additional CFA 43 billion annually for the CTDs. An additional CFA 20 billion is expected from "doubling the special excise duty from 0.5% to 1%, earmarked for waste collection and treatment," as stipulated by the same law.
In total, these new funding sources will strengthen municipal resources by CFA 126.4 billion, Finance Minister Louis Paul Motazé said during his presentation of the bill to Parliament. According to the minister, this amount will complement revenues currently collected by the tax authority on behalf of the CTDs, which totaled CFA 261 billion in fiscal year 2023. This represented 7.3% of the state’s own revenues.
Through the local taxation law, the government aims to raise the share of the state’s own revenues allocated to CTDs to at least 16%. This initiative, Minister Motazé said, seeks to accelerate the financing of decentralization in Cameroon.
Brice R. Mbodiam