Editorial

Editorial: Tax increases should be reflected in social amenities!.

by Editorial team
11 Dec 2024 10:29
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Each year, the CPDM government navigates an incredibly challenging budgetary Finance Law, marked by economic uncertainty, rising debt levels, climate shocks, and an ever-pressing need for infrastructural development, for which taxes are needed to sustain the economy.
Amid the challenges, government has been succeeding in collecting taxes, which are increased and diversified, to even include pensions and personal tax declaration for every Cameroonian, including the melee of unemployed.

Last week, The Guardian Post, the screaming voice of the voiceless, pleaded with a banner headline: “2025 Finance Bill: Gov't, have mercy on Cameroonians!”

The budget is 7,250.8 billion FCFA, for the general allocation and 66.9 billion FCFA for Special Allocation Accounts (CAS). Compared to last year, these amounts show an increase of 0.5% for the general budget and 1.5% for the CAS.

Regarding the structure of the 2025 budget, the government projects internal revenues and donations to total 5,548.1 billion FCFA, an increase of 313.1 billion FCFA, compared to 2024, which stood at 5,235 billion FCFA, marking a 6% increase.

However, oil revenues, estimated at 734.8 billion FCFA, are expected to decrease by 66.8 billion FCFA, due to the drop in global oil prices and the decrease in the exchange rate of the dollar and the CFA franc.

The document also projects an economic growth rate of 4.1% in 2025, up from 3.8% in 2024. This growth is driven by the non-oil sector, which is expected to grow by 4.3% in 2025, following growth rates of 4.1% in 2024 and 3.6% in 2023.

Inflation is expected to continue its downward trend but will remain above the 3% convergence threshold of the Central African Economic and Monetary Community, CEMAC. It is projected to be 4% in 2025, down from 5% in 2024.

The bottom line is that there has been an increase in the budget and taxes, as well as projections in revenue.

That increase will be noticed like in the last two years in the increase of the price of fuel as subsidies will be removed again. That, as in previous years, will trigger inflation and costs of living in various sectors of the economy.

Increasing taxes has its ugly side effects, leading to a concomitant increase in the price of consumer goods. What has been shocking is the requirement for online declaration of personal taxes for every Cameroonian.

How do they do it in remote areas, where there is no electricity. Even if there is electricity, not up to half of Cameroonians have internet connections in their localities, while many are still unable to read and write!

There is actually nothing wrong in increasing taxes. What is wrong, and revolting is that in the case of the various taxes imposed on Cameroonians, debts continue to mount while social amenities and infrastructure remain apologetic.

Even teachers who constitute over 34 percent of the civil service, are still being owed, despite a wave of increase in taxes in the past three years.

While presenting government's economic, financial, social and cultural programme for the year 2025 in Parliament, the Prime Minister, Head of Government, Dr Chief Joseph Dion Ngute, revealed that some 36 billion FCFA of teachers' arrears would be done in 2025. So, even with the whopping increases, some civil servants could still be owed!

The bitter truth is that the soaring of taxes at every turn and twist is not being translated into development and the social wellbeing of the ordinary citizenry bearing the brunt.

No matter from which direction one looks at it, the bitter truth remains that it does not augur well for business competitiveness and creation of enterprises to drive the economy.

As research at the Nkafu Institute has found out that despite the current economic situation, which is somewhat favourable to the collection of sufficient tax revenues to ensure the State’s standard of living and finance the development projects envisaged, government’s decisions to revise upwards "are not likely to encourage economic recovery and can rather contribute to favoring the predominance of the informal sector".

That should explain why Ease in Doing Business index ranks Cameroon 167, among 190 economies in the ease of Doing Business.

Increase taxes, but let it be reflected in good roads, efficient electricity, affordable medical and educational facilities. The population can tackle inflation and high costs of living, even if grumbling in silent.

This article was first in The Guardian Post Edition No:3316 of Tuesday December 10, 2024