
In order to ensure the collection of taxes, each jurisdiction adopts the tax system that it considers
optimal, depending on its socio-economic context. Cameroon legislator has opted for a declaratory
tax system. Under this system, taxpayers declare and pay taxes calculated on a tax base that they
determine themselves. Such freedom is likely to lead some taxpayers to reduce the amount of tax
they pay by declaring inaccurate tax bases. Tax audit is therefore seen as a counterweight to this
taxpayer’s freedom. For the tax authorities, this consists in checking and correcting total or partial
omissions in the tax base, deficiencies and inaccuracies or errors in taxation. However, willing to
collect as much tax as possible, the tax authorities are sometimes guilty of certain abuses that are
often detrimental to the taxpayer during tax audits. Fortunately, in recent years Cameroon’s tax
legislator have embarked on a process of modernising and strengthening taxpayers’ rights and
guarantees, by introducing new mechanisms. In this perspective, the 2021 and 2023 Finance laws
and their implementing circulars provide for privileges granted to taxpayers during tax audits. These
are new prerogatives that allow taxpayers to appeal to the tax authorities either to settle differences
of opinion with the audit inspectors during ongoing audits, or to obtain the avoidance of the tax
audit. This raises the question of the exact content of these privileges. The answer to this question
leads us to analyse separately the recourse to arbitration by the Director General of Taxation (DGT)
(I) and the exemption from tax audit (II).
I. Recourse to arbitration by the Director General of Taxation
Introduced by the 2023 finance law, recourse to arbitration of the Director General of Taxation (DGT)
represents an important means of protecting the taxpayer’s interests during a tax audit. Under this
mechanism, the taxpayer has the right to refer the matter directly to the DGT for a ruling on certain
tax adjustments envisaged by the auditors. This is permissible where there are clear differences of
opinion between the taxpayer and the department in charge of the audit, and where the amounts of
the adjusted taxes are likely to prejudice the taxpayer’s ability to continue in business. This is what
emerges from a careful reading of section M 28a of the Manual of Tax Procedures (MTP). This right of
referral to the DGT may be exercised by the taxpayer or the department in charge of the tax audit
before the tax assessment notice is issued. The merit of the DGT’s arbitration lies in its two
fundamental consequences. The first is the suspension of the tax audit and the second is the re-
examination of the grounds for adjustments envisaged by the audit department. With regard to the
suspension of the audit, paragraph 2 of Section M 28 of the MTP states that the suspension takes
effect from receipt of the request for arbitration. As a result, any procedural act carried out by tax
inspectors becomes null and void until the DGT has issued his decision. With regard to adjustments,
recourse to arbitration by the DGT allows the taxpayer to benefit from an adversarial re-examination
of his observations and claims by a department other than and hierarchically superior to the one
initially in charge of the disputed audit. This allows the taxpayer to discuss the facts and arguments
put forward by the tax inspectors. With a view to protecting the taxpayer more effectively, the
circular implementing the 2023 Finance law specifies that while the DGT’s decision is binding on the
audit department, the taxpayer may contest it if he considers it unsatisfactory. It should be noted,
however, that recourse to arbitration by the DGT is subject to a well-defined procedure that must be
followed in order to benefit from the associated advantages. The same applies to the exemption
from tax audit.
II. Exemption from tax audits for taxpayers
The 2021 Finance law has instituted, amongst its major innovations, the possibility of being
exempted from a tax audit. This is also a means of protecting and securing the taxpayer’s interests.
Laid down by Section M 41a of the MTP, this measure allows taxpayers to avoid being audited for a
given financial year. This means that the taxpayer is exempt from verification and correction of total
or partial omissions in the tax base, deficiencies and inaccuracies or errors in taxation. This results in
tax savings because no adjustments are made. Such a privilege reflects the legislator’s stated
intention to guarantee the protection and continuity of the taxpayer’s business. In order to have an
overview of this mechanism, it is necessary to unveil its scope and the conditions required to benefit
from it. As far as the scope is concerned, the exemption applies to all forms of audit provided for in
the MTP, namely audit of accounts, audit of the overall tax situation, spot audit, and desk audit.
However, this exemption does not apply to audits to validate VAT credits, damage report, and all
audits carried out at the express request of the taxpayer. With regard to the required conditions, the
taxpayer must provide evidence of an increase of at least 15% in the amount of taxes paid from one
financial year to another, as per paragraph 1 of Section M 41a of the MTP. Within the meaning of
paragraph 2 of this Section, the increased rate is made up of the total amount of taxes actually paid
plus any adjustment resulting from tax audits during the financial year in question. Paragraph 3 of
the same Section excludes from the increased rate, the additional revenue resulting from an
authorisation to retain taxes at source, a new tax measure or the start-up of a new activity. In
addition, the legislator prohibits the taxpayer from obtaining the exemption through proven fraud.
Failing this, the tax authorities are entitled to revoke the exemption granted and to schedule a tax
audit for the year in question.
In conclusion, according to recent changes in Cameroonian tax law, taxpayers benefit from two main
privileges when it comes to tax audits. These are recourse to arbitration by the DGT and exemption
from a tax audit. The first allows the taxpayer to benefit from the suspension of the tax audit,
followed by a re-examination of the tax adjustments envisaged by the audit department. The second
allows him to be exempted from verifications and corrections of omissions, errors or inaccuracies
revealed in his tax base. This enables them to make savings. However, the benefit of these privileges
is subject to scrupulous compliance with the various mandatory legal procedures relating to them. To
this end, taxpayers should seek the assistance of certified tax consultants.
Author: Luc Gwate Njip, Tax & Legal Consultant; Supervisor: Albert Désiré Zang, Managing Partner