Edwin Fongod Nuvaga, Director General of Customs.
What is the situation of Cameroon Customs with regards to the 2018 budget?
The 2018 budget was drawn up in a context of dropping fuel prices, and unfavorable security situations. The insecurity on the borders in the Far North led to the closing of many customs offices. Insecurity causes traders to look for other routes and get into the country without paying customs duties. They do so with the blessing of warlords. There are conflicts once in a while on the eastern border with rebels from the Central African Republic. This is not good for trade. In the South, the border in Kye-Ossi is closed every now and then prompting goods to be smuggled in; and we lose revenue. The recent upheavals in the North West and South West Regions are equally impeding cross-border trade. For instance, the Ekok customs office used to generate about FCFA 350 million monthly. In the month of December which is supposed to be a boom, we barely made FCF 40 million. Within the framework of the budget, we are supposed to accompany not only economic activity but the development plan of the country following the prescriptions of the Head of State. We are preparing the AFCON2019. Most of the goods coming in are exonerated and we have to shorten the transit time of the products. We have to support the PLANUT, the special youth program and many other programs in health, education, and infrastructure, intended to improve on the lives of citizens. The President usually gives orientations before any budget is drawn up. For 2018 he requested the customs sector should improve on the tax base because of the EPA’s negative effects on revenue. So we have to look for a means to cover the gap created by the agreement. We need to secure trade and revenue. That is the premise on which the national assembly adopted the measures we find in the finance law.
What are some of the measures taken to increase revenue?
Two groups of measures have been put in place. One is to facilitate trade and encourage enterprises while the other one is to increase revenue. To increase revenue the government has decided to increase the export duties on timber logs. This is because government increased the export duties for sun timber by 2.5 per cent; that is, from 17.5 to 20 per cent. The idea was to reduce the exportation of timber to encourage companies to invest and transform them locally because exporting them whole does not generate added value. Unfortunately the expected outcome was the opposite. The exportation of timber logs instead rose. This year government decided to increase the duties to 30 per cent. The state has given many concessions and exonerations within the 2013 law on promotion of investment to encourage companies to come to Cameroon, set up companies and transform goods locally. We allow companies to import equipments to set up factories. Government has also fixed export duties on some unique products such as eru which is exported in huge quantities, Penja pepper and Oku honey. The current security situation also warrants that we should not make arms easily available. So we decided to fix an excess tax of 25 per cent on arms and ammunitions.
What mechanisms have been put in place to encourage local companies?
To accompany companies we facilitated the importation of cars since we realized that the average age of used cars imported into Cameroon is 18. Normally 18-year old cars are not road worthy. We decided to change the car market by opening bonded warehouses. It gives businessmen the opportunity to bring in goods duty free. Cars will be imported; buyers will go to the warehouses, choose cars and pay customs duties by themselves. We also intend to curb smuggling in of cars from West Africa. Another measure proposed to us by GICAM; to drop charges on imported software from 20 to 30 per cent. The 10 per cent drop is very important now that we are in the age of digitalization. We also decided to exonerate certain products in the agriculture and health sector. We have things like watering cans, medicines including food supplements. Goods like sardines have also witnessed a drop in import duties. We will work hard to achieve our target which is drawn up following our economic program backed by the IMF.