• Cameroon shifts from tax exemptions to tiered investment tax credits
• Syndustricam says reform risks sidelining SMEs, lacks clarity
• Ordinance bypassed parliament, raising concerns over democratic process

In the latest issue of "Chroniques de l’industrie,” Syndustricam, the Cameroon Union of Industrialists, offers a critical reading of the ordinance signed on July 18, 2025, by President Paul Biya. The latter deeply reforms the law of April 2013 on private investment incentives in the Republic of Cameroon, amended in 2017.

One of the major innovations of the ordinance is the introduction of tax credits for project investors, in place of the 5 to 10-year tax exemptions on which the 2013 text was based. Now, "instead of temporarily exempting the company from all tax burdens, the State grants it the right to deduct a part of its investment from the corporate tax to be paid. The rates displayed are ambitious: 25% of the amount invested for a standard project, 50% for investments made in priority zones, and up to 75% for those established in particularly remote areas," notes Syndustricam.

According to this trade organization, "on paper," the new system "seems attractive, because the advantage thus becomes proportional to the effort made [by the investor, Ed.], which gives a more pronounced logic of justice and transparency than the blanket exemptions of the old regime." Syndustricam also recalls that the new provision dedicating the substitution of tax exemptions with tax credits comes with "a five-year carry-forward clause, which allows the benefit to be spread out if profits are not immediately sufficient to absorb it."

Tax incentives deemed ineffective

However, the application of this reform is not a foregone conclusion, according to the union. "First, a tax credit is only really useful if the company generates taxable profits quickly enough. However, many industrial projects do not generate profits in the first years of operation, which risks turning the credit into a theoretical advantage, impossible to claim," explains Syndustricam.

"Furthermore, the five-year carry-forward period remains short for many long-term return industrial projects. Moreover, the question of its articulation with the minimum tax of 2.2% of turnover remains unanswered. If this credit cannot be applied to this floor tax, it will lose a large part of its effectiveness, especially for industrial SMEs. Thus, a tool that was intended to be a driver of competitiveness risks remaining a theoretical advantage, de facto reserved for large, short-term profitable companies," the employers' organization continues, without making any concrete proposals for a better implementation of this part of the reform of the investment incentive system in Cameroon.

According to Cameroonian authorities, the ordinance passed by the Head of State on July 18, 2025, aims to rationalize tax gifts for project investors, in accordance with the April 2013 law on investment incentives in Cameroon. According to the IMF, the exemptions contained in this law were not very effective after more than 10 years of application.

This, notes Business in Cameroon, is in a context where public authorities have as their leitmotif the increase of the collection of tax and customs revenues (and even non-tax revenues), in order to satisfy ever-increasing needs.

Existing SMEs and SMIs excluded

"Investment incentives in the Republic of Cameroon must be completely rethought. Since the promulgation of the law in April 2013, Cameroon has adopted new public policies and reforms that have an impact on investment. All of these elements have made several provisions of the regulatory framework on investment incentives obsolete, as they are out of step with these new government orientations," also declared the president of the Grouping of Cameroonian Enterprises (Gecam) on September 18, 2024, thus calling for the reform that finally occurred on July 18, 2025. And on which Syndustricam is accumulating concerns.

Indeed, in addition to the constraints that could accompany the effective application of the substitution of exemptions with tax credits, the organization notes other limits of the text signed on July 18, 2025, by the President of the Republic. These include the marginalization of existing industries; the exclusion of active SMEs and SMIs; the ambiguity on the eligibility of large retail companies; the failure to take into account certain proposals made to the government by the employers' association; or the government's decision to favor the path of the presidential ordinance over that of the law, which would have led to a debate on the text in the National Assembly...

"By choosing to proceed by ordinance rather than through the legislative channel, the executive has visibly favored speed and political control to the detriment of debate and consultation. This choice raises questions: wouldn't such a strategic text for the country's attractiveness and competitiveness deserve a public and contradictory examination before the national representation? By depriving itself of the passage through Parliament, the text suffers from a lack of democratic debate, even though it touches on structural issues (investments, taxation, competitiveness) and could be a victim of a lack of adherence," argues Syndustricam.