To boost production, improve quality: Government exempts VAT on locally produced flours.

File photo, locally produced yam flour

The government, in the 2025 Finance Law, has exempted local flours made from maize, yams, cassava, sweet potatoes and others from Value Added Tax, VAT. According to a document published recently by the Directorate General of Taxation, the measure by the government is designed to support consumption and boost local industry as it would result in lower prices for consumers and support for local producers. 



In addition to the reduction in production costs that this measure will bring, players in the sector see it as a facility that will help to improve product quality.

The Chairman of the Platform of local flour promoters, Georges Mbanda, explained that this comes at a time when the volume of local flour production is expected to exceed 13,000 tonnes.

“It could be more, if we take into account the quantities produced by small producers in the hinterland,” he stated.

According to those involved in the sector, there are about four major producers and processors based in the cities of Yaounde and Douala who, given the capacity of their equipment, can produce 200 tonnes a day, in addition to the 13,000 tonnes mentioned above. 

The stakeholders revealed that overall, Cameroon is capable of producing more than 62,000 tonnes if all the right conditions are met.

 

Local producers laud initiative

Producers of local flours for consumption have appreciated the government’s decision to exempt local flours from VAT. 

Georges Mbanda pointed out that the measure reflects the fact that the government is very attentive to the grievances that they have been expressing for several years. 

“We have been saying that if we're not competitive, it's because we import subsidised products from elsewhere while we local players were entitled to nothing. Now, by granting us these facilities, we are buying machines at reduced prices, which has an impact on the cost of production and the quality of the products put on the market,” Mbanda said.

A producer of local cassava flour in Kano in the East Region, Ibrahim Halilou, was overjoyed to receive the news that the government had decided to exempt local flour from VAT. 

“At last! This is one of the measures we have been waiting for. I am very happy. This measure will enable me to reduce my production costs, produce more and improve quality even more,” Halilou enthused.

 

Price drop expected at 400 FCFA per kilo

The Chairman of the Platform of local flour promoters has also urged authorities to ensure that this exemption becomes a reality because with it and other measures, a kilogramme of local flour could sell at 400 FCFA, which is a gain for consumers. 

At present, prices vary between 700 FCFA and 1,000 FCFA per kg and as a result, they are not competitive.

With regards to the penetration of local flours in consumer habits in the country, another local flour producer, Michel Fegwan, regretted that Cameroonians are looking for local flours, but are having trouble finding them because of low production. 

He, however, expressed hope that with this new incentive by the government, they will have to produce more to meet local demand.

 

This story was first published in The Guardian Post Edition No:3340 of Thursday January 16, 2025

 

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