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July, 2019

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Brief: In Cameroon, if you are caught carrying out any illegal or prohibited business activity, you would have to pay a 100% business license penalty for the length of time you have been engaged in the said activity

In my last post, I elaborated on the business license contribution in Cameroon and how people still confuse it for income tax. I also promised to share with you some business license penalties or sanctions that come as a result of late payment, non-payment or failure to display the license. In addition to the aforementioned, there is one sanction that many people are not aware of. I am talking of those carrying out illegal or forbidden activity.

Business license penalty for illegal or forbidden activity

If you know you are carrying out an illegal or prohibited activity in Cameroon, note that you are liable to pay not just for the business license, but also an additional 100% penalty. If you may think that’s all, then you are mistaken. You will pay for the the number years you have been carrying out the activity. The fun about this is that you will not be issued the license. How does that make you feel?

A report on such illegal or prohibited activity is drawn up by a tax officer with the rank of a controller or any sworn-in law enforcement officer. This is then forwarded to the appropriate quarters. After all is done with the taxpayer, the law can then follow it’s course. Paying the business license when caught carrying out illegal or prohibited activities in Cameroon doesn’t exonerate from the hands of the law. It’s a two way thing

A startup in Cameroon

Photograph 2018 © Copyright Openhub

– it’s either the law enforcement officers hand you to the tax authorities to get what is due the state coffers or

– the tax authorities get what they are due and deliver you to the law enforcement officers. Either way, you will have to pay the license with a 100% penalty addition.

Scams and “feymen” should take note

The list of illegal or prohibited activities are so many and its calculation is at the discretion of the tax administration. In the case of “Feymen” or scams, their known wealth is calculated and evaluated on the basis of their standard of living. Your luxury car can determine your class which maybe used by the tax office. Something like “you need to earn this amount of income to drive such a car or live in such a house”. From that, your annual turnover is determined and multiplied with the suspected number of years that you have been carrying out the said activity. This serves as the basis for calculation with a 100% business license penalty slammed on it.

“Scams and “feymen” should take note”

Other business license sanctions & penalties

  • Payment delay – a delay in paying the business license contribution carries a monthly penalty of 10% with a maximum of 30% of the amount due. This means the ceiling level is at three months upwards where you pay 30% of the principal tax.
  • Failure to display – a penalty of 10,000 francs cfa is charged for any taxpayer who does not display the business license. Display should also be done where it can easily be visible upon entry at your business premises especially shop owners.
  • Transport businesses – in the case of transport enterprises, failure to present a valid business license may lead to the tax authorities in charge of the control to impound your vehicle. This is done in compliance with the appropriate procedures put in place by the law. This ends after the full amount due has been paid.
  • Failure to pay – any taxpayer engaged in business license liable activity and fails to pay shall be assessed for the entire year. This doesn’t end there – the amount payable shall be increased with a 50% to 100% penalty depending on best judgment assessment or whether good faith is established or not.

 

View our interivew on YouTube

Video 2019 © Copyright OpenHub

Failure to pay outstanding amount

It should be noted that measures concerning the impounding of vehicles or closure of businesses are still being carried out by the tax office. In the case where the taxpayer fails to pay the outstanding amount within the period provided, the business is immediately sealed with no prejudice elsewhere for the provided penalties.

For those having a transport business license, the authority in charge of carrying out the control is empowered to impound the vehicle concerned to be released only upon payment of the full amount due.

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