Finance minister suspends application of tax on workers’ benefits.

The information is contained in a release which the minister issued on January 12. According to the member of government, the decision to suspend the application of the provision is pending further clarification.

Minister Motaze’s release stated that: “The suspension in question concerns the overall taxation of cash benefits paid to employees as benefits in kind: housing, electricity, water, vehicles, servants and food”.

To note that, the institution of the law had sparked fears in various quarters especially among employees and employers of labour. 

It previews cuts on income of salaried workers of higher categories. Celestine Tawamba, President of the Association of Enterprises of Cameroon, GECAM, is quoted as having remarked that the provision will see a reduction of between five and 25 percent depending on the category of the worker.

Before the minister’s decision, they had also been a general outcry on expected cuts on housing, electricity, water, vehicle, servants, food, fuel and other benefits.

Media reports quotes a tax expert as having explained that: “When employees receive certain benefits from their companies, these are taxed at a rate applied to gross salaries”.

The income tax, others argued, is already being calculated at: Housing 15%; vehicles10%; 5% per domestic servant; water 2% and electricity 4%. The 2024 Finance Law has provisions for taxing in new areas such as: telephone 5%; fuel 10%; domestic 5% and internet 5%”. 

Many have in the last few weeks argued that the new taxes will step up tax pressure on a majority of employees in the formal sector, and significantly weaken the purchasing power of citizens in the phase of a rise in the cost of living.

Before the coming into play of the now suspended tax, some employers’ associations had raised hell over its institution. For the 2024 fiscal year, revenue from taxes and duties is projected at 2,888.4 billion FCFA. 

The projection is up by 14.5% compared to the 2023 target of 2,523.4 billion FCFA. This increase, sources say takes into account the upturn in economic activities among other measures.