Cameroon’s New Small-Business Tax Raises CFA15 Billion as Withholding Rules Strain Cash Flow

Nearly CFA15 billion collected under Cameroon’s General Synthetic Tax (IGS) for the 2025 fiscal year was transferred to municipalities in the first half of 2026, as businesses press the government to change withholding rules they say are tying up cash.

Director General of Taxation Roger Athanase Meyong Abath announced the figure on August 25 in Douala during consultations with the private sector ahead of the 2027 Finance Law.

According to the tax chief, the amount was 14% higher than in 2024. The Directorate General of Taxation (DGI), however, did not disclose the comparable 2024 revenue or the final 2025 amount, which is expected after the accounts are closed. For comparison, if the 2025 figure were exactly CFA15 billion, a 14% increase would put the 2024 amount at about CFA13.16 billion.

The announcement updates an earlier Finance Ministry assessment. In a May 18 statement, the ministry said CFA10.35 billion had already been transferred to municipalities for the 2025 fiscal year, following a CFA6.93 billion payment representing the balance of IGS revenue collected between May and December 2025. The latest figure suggests roughly CFA4.6 billion in additional transfers, although the DGI has yet to provide a breakdown.

Revenue Still Difficult to Compare With CFA50 Billion Forecast

The IGS was established under the December 23, 2024 local taxation law and took effect in 2025. It replaced the former discharge tax and simplified tax regime, combining several levies into a single flat-rate tax, including the business license tax, VAT and income tax applicable to eligible activities.

At the Finance Ministry’s annual conference in February 2025, the DGI estimated that the IGS would generate CFA50 billion in additional revenue. On a purely arithmetic basis, the roughly CFA15 billion announced so far represents about 30% of that projection.

That comparison should be treated cautiously. The DGI did not specify whether the CFA50 billion forecast referred to gross collections, net revenue transferred to municipalities or expected revenue after the system had been fully implemented. It would therefore be premature to conclude that the tax has fallen CFA35 billion short of expectations.

Since January 1, 2026, the IGS has applied to commercial, industrial, artisanal and agricultural activities with annual revenue excluding taxes of no more than CFA50 million. For liberal professions and other non-commercial activities, the threshold is CFA30 million.

Since April 2026, an interconnected system between the DGI and the Treasury has also allowed the municipalities’ share of IGS revenue to be transferred automatically to their accounts without first passing through the Treasury Single Account, according to the Digital Resource Center on Public Finance Reforms.

Withholding Credits Delayed Until the Following Year

The growing tax revenue has nevertheless created a cash-flow issue flagged by the Cameroon Chamber of Commerce, Industry, Mines and Crafts (CCIMA).

Since January 2026, authorized customers have been required to withhold 2% of the pre-tax value of invoices paid to taxpayers subject to the IGS. The rate rises to 5% for services provided to the central government, local authorities and public institutions under public procurement contracts. Guidance implementing the 2026 Finance Law states that these withholdings cannot be deducted from quarterly tax payments during the year in which they are collected. Instead, they can only be credited against IGS owed the following year.

For example, a small business that invoices a public entity CFA10 million before tax for a service would have CFA500,000 withheld. That amount does not reduce its IGS payments due in 2026 and can only be credited in 2027. The business therefore temporarily bears both the withholding and its current tax payments.

CCIMA argues that the delay could leave businesses with tax credits that are difficult to recover if their activity declines or ends, or if they leave the IGS regime before the following fiscal year. It proposes allowing refunds of unused balances when a business ceases operations or moves into another tax regime.

The regulations reviewed provide for credits to be applied the following year but do not specify how remaining balances should be treated in those two circumstances. CCIMA’s proposal seeks to address that uncertainty while reducing the amount of cash small businesses must leave tied up.

The proposal is among 24 submitted to the DGI during consultations that opened on August 25. The tax administration said the proposals will be assessed based on their legal feasibility, budgetary impact and the Finance Ministry’s policy priorities.

Frédéric Nonos