Cash-strapped Cameroon Takes Desperate Measures to Keep Country Running, Taxing the Poor to Near Suffocation

With a crushing publicly guaranteed debt amounting to 10,511 billion (45.8 percent of GDP), an inflationary spiral, a heavy corruption, and embezzlement machinery, and prosecuting two wars-one against Boko Haram and another against citizens of the Once Independent State of Southern Cameroons bent on restoring their country and renaming it Ambazonia, Cameroon’s treasury is increasingly suffering significant stress.

And so, Cameroon has in recent days taken desperate measures to increase public revenue, one of which may compromise the health of millions of people in the Central African country.

In a surprise note dated April 6, the Secretary-General of the Presidency of the Republic, Ferdinand Ngoh Ngoh, has put an end to free Covid-19 testing in Cameroon.

“In view of the persistence of the Covid-19 pandemic and the resulting budgetary constraints, I have the honour to pass on to you the very high instructions of the President of the Republic, prescribing that PCR screening tests against Covid-19 should henceforth be paid for, at a flat rate of thirty thousand (30,000) CFA F about USD60),” Ngoh Ngoh wrote to the Secretary-General of the Prime Minister’s Office, Seraphin Magloire Fouda.

The note explains that a secure mechanism for the payment of fees for these PCR tests will be instituted in consultation with the Ministry of Finance and the Ministry of Public Health, “in order to ensure the traceability of resources generated by this measure”.

Discordant voices have been rising against the measure, with critics saying that it could reverse the gains made in the fight against Covid-19, given the escalating poverty rates in a country where the minimum guaranteed wage is a mere CFA F 36,250 (about USD70).

The recent measure follows several other apparently desperate measures taken to balloon the country’s increasingly slimming budget.

These include a 0,2% tax on all mobile transactions, included in the 2022 Finance Law that is expected to generate about XAF 20 billion in revenue. The tax is applicable on transactions carried out via any traceable technical platform (like internet, mobile phone, wire order, telex, and fax).

It generated huge opposition online, with tech guru, Rebecca Enonchong describing it as “a tax against the poor”, and that it undermined the basis of tax equity.

The government has also placed taxes on non-profit associations, including tontines, mutuals of companies, etc…

“A tontine that limits itself to collecting the savings of its members and returning them to them at the end of a given period cannot see its members taxed on the return of their funds since it is a simple interest-free saving,” the government explains.

Government explains further that these taxes concern associations or tontines which carry out catering, rental, tourism and leisure operations, or any other commercial activity.

The Director-General of Taxation claims it’s more a question of normalizing a situation than of raising revenue.

But that explanation falls flat. Most Tontines do lend money out to its members, and the text explains that such an activity is more like “investing money, and can earn income from them, this constitutes a capital gain that is taxable.”

It’s a 15% income tax, in addition to a 10% council tax.