Cameroon 33% phone tax explained in details.
As per the announcement of Cameroons Minister of Post and Telecommunication, as from October 15th, the government will implement the Phone Tax law which will permit phone and tablet users in Cameroon to pay 33% on tax after purchasing any of these electronics.
Many People have sent me messages to explain exactly how the new phone tax works. " Does this 33% phone tax mean phones shall be more expensive in Cameroon?, Who's going to pay the 33% phone tax in Cameroon? The consumer or the supplies?, How are they going to pay?".
In this article, I will explain with some practical examples on how the 33% phone tax works. It is also important to note that many Cameroonians have criticized this announcement without knowing the detail how the 33% Cameroon phone tax works.
Understanding the 33% tax on imported phone in Cameroon. After my research. I learned that prices of phones are unchanged, check how it works.
How the 33% Cameroon phone tax works
Every phone or tablet connected to any telecommunication company in Cameroon after inserting a sim card, the IMEI of the phone will be identified.
Note: This is workable only in phones that have never been used in Cameroon.
The phone or Tablet owner will receive a message telling them how much they owe as phone tax. 33% worth of the phone will be calculated and included in the message. There will be an option on how to pay the money.
Practical example one
HOW TO CALCULATE 33% PHONE TAX IN CAMEROON
Let's say the cost price of a phone =100000FCFA, calculate 30% of the cost price.
Solution
Now, let's calculate 30% of 10000FCFA. This can be calculated as thus:
30÷100(100000) = ?,
Implies 0.3 × 100000 =?,
implies 30000FCFA = ?.
Therefore 30% of 100000 = 30000FCFA.
What does this mean?
This means a phone that you used to buy for 100000FCFA is now going to be sold at 130000FCFA.
If you are the one to pay the 30% phone tax in Cameroon, you will buy the phone for 100000FCFA and pay 30% tax( 30000). So, you will still end up buying it for 130000FCFA.
Phone dealers can pay the tax in advance so that their clients can buy and use a tax free phone. Meaning the price of phones will increase.
Foreigners using phones on roaming will be excluded from the tax.
Phones bought before the 15th of October will not use this new new tax method. This means the phones must have been taxed using the other form of payment.
Is this all you need to know about this 33% phone tax?
No, there is still little to discuss below.
From what I understand, this tax is not actually new, the new thing in it is the announcement of the new form to collect this tax. Let me explain.
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Let's take another scenario.
If these phone dealers in Cameroon use to pay this same tax via other means, then nothing has really changed, it's only the means of payment.
Example two.
Let's say a phone use to be sold at 100000FCFA,
That's after the phone tax must have been paid. Then, 30% of 100000 FCFA = 30000FCFA. This amount shall be subtracted from 100000FCFA.
This means an individual will now buy the same New phone at 70000FCFA and after inserting a SIM card, A message will be sent on how to pay the 30000FCFA. So, at the end the price of the phone will be unchanged.
Minister of Post and Telecommunication, Minette Libom Li Likeng has taken to Twitter, saying the taxes, is not a new tax per se but a change of collection of the taxes from physical to digital in order to avoid fraud and tax evasion.
Overall prices of phones are expected to remain the same. However, most critiques still believe the new tax system will substantially increase phone prices.
Unhappy Cameroons on twitter are currently trending the Hashtag "EndPhoneTax". Some equally expressed their worries via Facebook comments "Instead of putting tax levy on the import of goods that are widely produced in the country so that home based companies can be protected, they are busy putting tax levies on phones. Rice is a good example. The import if rice should taxed heavily not phones".
According to the minister of post and telecommunication, this is just a change of tax form of payment not increase in tax, many Cameroonians criticize the announcement just because they think it's an increase in tax on phones by 30% as explained in the example one above which means a rise in price of phones.
"Ceteris paribus" everything being equal, no price of phones are affected, only the means to pay the 33% Cameroon phone tax have changed. One Question now is how effective the new Cameroon 33% phone tax collection method will be.
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