What Cameroonians should know about personal income tax

By Njong Shey

There have been debates lately about the personal income tax that the government instituted a year ago.

However, a lot of people say they don’t know where to pay. Meanwhile, some complain that they don’t earn and shouldn’t pay personal income tax.

Like in the yesteryears when people used to pay head tax and were issued a card, this one is different. The government is not there to know how much you have earned. It is declarative, meaning the individual tells the government how much he makes, and the government taxes a portion.

People and earnings taxed

Personal income tax (PIT), according to the Ministry of Finance, is a direct tax levied on the earnings of all natural persons.

The people who are compelled to pay this tax are all natural persons who have their fiscal domicile in Cameroon. Or who earn income from Cameroonian sources, such as wage earners, pensioners, and annuitants; traders, farmers, and craftsmen; landlords; and liberal professionals.

According to the Ministry of Finance, categories of income liable to personal income tax are salaries, wages, pensions, and annuities. Others are profits made by traders, craftsmen, farmers, and liberal professionals; land revenue; income from capital; and related revenue.

Earnings Exempted from Tax

Not everyone is compelled to pay taxes, even though the personal income tax falls on everybody living in Cameroon and above the age of 18.

As per the new tax regime, exemption from the personal income tax varies. Exemptions depend on the categories of income.

For instance, monthly wages of less than 62,000 FCFA; interest on savings accounts for placements not exceeding 10 million FCFA; interest on cash vouchers; and scholarships.

Still also exempted from tax are overall net profits of less than 500,000 FCFA on the transfer of shares, bonds, and other capital investments made by individuals and bonds issued by companies.

Percentage deducted from personal income tax

The government has issued a fixed percentage of tax to pay depending on the amount earned by an individual within one year. The amount of tax due is obtained by applying the following scale to the overall net rounded income of the taxpayer:

From 0 to 2,000,000 pays 10%, while from 2,000,001 to 3,000,000 pays 15%. meanwhile, earnings from 3,000,001 to 5,000,000 pays 25% and over 5,000,000 pays 35%

According to the Ministry of Finance, taxpayers should file before 15 March of each year a detailed return of their earnings.

However, wage earners who do not have any other source of income are exempt from the filing of returns at the end of the year.

Money deducted at source as personal income tax

The procedures listed are for those whose earnings come from selling, renting, or doing something in the form of self-employment. Now, those who receive earnings for doing a job have their tax cut directly at the source. For example, if you earn a salary, your employer should deduct tax first before paying you.

“Any person who pays revenue as salaries, wages, indemnities, emoluments, pensions, or life annuities within the framework of an activity carried out in Cameroon is bound to make deductions on salaries,” the Ministry of Finance explained.

However, the tax is not deducted from every earning. Only salaries equal to or higher than 62,000 FCFA are subject to deductions at source in respect of income tax. Persons with revenue lower than this amount are exempt from this deduction.

So, after deducting the tax from your employee’s earnings, employers must remit to the Public Treasury. The withheld amount should be paid by the 15th of the month following the one during which the salary was paid.

Where to pay personal income tax

The Directorate General of Taxation, has set up a platform for individuals to register, declare, and pay taxes. To access the platform, one needs to just type in the internet address bar: www.impots.cm/en. This address will take you to the platform where you follow the procedures and register, then declare and pay. Upon finalising the declaration and payment, then a document pops up for downloading. The Directorate General of Taxation says people can make payment via bank, mobile money, telepayment, or cash to designated banks.