Despite its significant potential in mineral resources, the contribution of mining activity to Cameroon’s
GDP remains insignificant. This can be explained by the fact that the country’s significant ore deposits
have remained largely under exploited. In fact, the 2001 Mining Code, as amended in 2010, had
several gaps and deficiencies that hindered the development of the mining activity. In order to address
these limitations and accelerate the implementation of mining projects, the Mining Code in force was
revised through Law No. 2016/017 of December 14, 2016. Aligned with the principles of
attractiveness, competitiveness, and profitability, the 2016 code reflects a clear intention to promote
the development of the mining sector by encouraging domestic and foreign investments. In this regard,
it provides a set of tax and customs incentives for mining companies and some of their subcontractors.
After a few years of implementation, the Mining Code was revised again through the adoption of Bill
No. 2044/PJL/AN in November 2023, and its promulgation is imminent. This Bill, although rich in
innovations, fully maintains all the tax and customs incentives provided for in the 2016 Mining Code.
The benefits primarily include tax and customs duties exemptions, as well as tax deferrals which apply
to mining companies at the exploration or production phase operating in compliance with the law.
Therefore, it is appropriate to question the true substance of these incentives. To answer this question,
it is necessary to distinguish the incentives in the exploration phase (I) from those in the production
phase (II).
I. Tax and customs incentives in the exploration phase
During the exploration phase, which includes prospecting, bulk sampling, and laboratory testing,
holders of exploration permit benefit from a range of fiscal and customs advantages. From a fiscal
perspective, Articles 179 of the Mining Code and 138 of the aforementioned draft law state that
investors are exempted from business license tax and enjoy free registration for the incorporation and
lifespan extension of their company, capital increase, and transfers of undeveloped immovable
property. It should be noted that such an advantage is already provided for in the General Tax Code
(GTC). In addition, they are exempt from Value Added Tax (VAT) on local purchases and imports of
equipment and materials directly related to mining operations, as listed jointly by the Ministers in
charge of Mines and Finance. Nevertheless, this exemption is subject to the presentation of an
exemption certificate issued by the tax authorities upon written request from the mining permit holder.
From a customs perspective, according to Articles 180 of the Mining Code and 139 of the draft law,
holders of exploration permit benefit from the temporary entry status for equipment used during the
exploration phase, as well as for professional equipment, machines, appliances, spare parts, and
mining site vehicles. Only tourism and private cars are excluded from this favourable regime.
However, the customs administration may, upon the proposal of the Minister of Mines, assess the
eligibility of tourism cars owned by mining companies for this regime under conditions determined by
regulations. Materials and spare parts necessary for the operation of professional equipment and
machines are duty-free. This exemption also applies to specific lubricants necessary for the
functioning of research equipment. Similarly, significant advantages are granted to mining companies
in the production phase.
II. Tax and customs benefits in the production phase
During the production period, which includes extraction, transportation, and processing of deposits,
holders of mining licenses also benefit from fiscal and customs advantages. Regarding fiscal benefits,
the combination of Articles 181 of the Mining Code and 140 of the aforementioned draft code
generally provide that mining companies enjoy a one-year staggered payment of registration duties for
the incorporation and lifespan extension of their company, and capital increase. These taxes can be
divided and paid by depositing one-third upon filing the document, and the second and third thirds
semi-annually. However, this privilege is ineffective because the GTC provides for free registration of
these operations. License holders also benefit from accelerated depreciation at a rate of 1.25% of the
normal rate for specific assets, the list of which is determined by the Ministers of Mines and Finance.
Furthermore, they benefit from an extension of losses carried forward from four (04) to five (05)
years. It should finally be noted that deeds of mining companies are exempt from registration and
stamp duties until the first commercial production, with the exception of those relating to leases and
residential rentals. As for customs incentives, they are provided for in Articles 182 of the Mining Code
and 141 of the aforementioned draft law. These articles stipulate that during the installation or
construction phase of the mine, holders of mining licenses are exempt from customs duties and taxes
on equipment, materials, inputs, and goods necessary for production, as well as on the first batch of
spare parts accompanying the startup equipment. However, this benefit does not apply to tourism and
private cars, equipment, and office supplies. The same exemption applies to replacement equipment in
case of technical incidents and expansion of operations, as well as specific lubricants. Furthermore,
investors benefit until the date of commercial pre-production as determined by the order of the
Ministers of Mines and Finance from importation taxes exemption. This exemption includes VAT and
customs duties on equipment and materials necessary for building construction.
In conclusion, holders of mining permits and their subcontractors can benefit from a range of tax and
customs incentives provided by the 2016 Mining Code and Bill on the New Mining Code. Consisting
of exemptions and tax deferrals, these benefits apply to mining companies during their exploration and
production phases. However, until the imminent promulgation of this law, it is advisable for investors
to seek advice and guidance to navigate the process of obtaining these privileges.
Author: Jean Didier Ozoto, Tax & Legal Consultant; Supervisor: Albert Désiré Zang, Managing
Partner