Among its main innovations, the 2025 Finance Law introduced a new procedure for arbitrary
tax assessment. This was achieved by amending Section M3 of the General Tax Code (GTC).
Prior to 2025, the first paragraph of this article stated: Any taxpayer who has failed to file
their tax return within the legally prescribed deadlines shall receive a reminder letter serving
as a formal notice to declare. They then have a period of seven (07) days to regularize their
situation. With the advent of the 2025 Finance Law, the Cameroonian tax legislature not only
amended this first paragraph but also added a second one. The aforementioned first paragraph
was supplemented as follows: Failure to do so and without prejudice to any applicable
penalties, the tax bases may be determined arbitrary by the Tax Administration under the
conditions provided in Section M29 and subsequent of the GTC. This amounts to the
establishment of a new arbitrary tax assessment procedure in addition to that provided in
Section M29. The new second paragraph states that the formal notice left without effect and
capable of triggering the new arbitrary tax assessment: “(…) may be notified by any means of
public communication deemed appropriate by the tax authorities, notably by way of the
press, public postings, or dissemination on a designated website”. While the implementation
of this procedure may help reduce failures in tax declarations and encourage taxpayer
responsiveness to enhance the efficiency of tax collection, it nevertheless creates significant
legal uncertainty for taxpayers and constitutes a considerable threat to their rights. This is
because the means of communicating the formal notice are left to the administration’s
discretion, which makes it difficult to balance optimal tax collection with the preservation of
taxpayer rights. Moreover, Section M29 of the GTC had already established an arbitrary tax
assessment procedure following a different formalism than that introduced in Section M3.
Hence, the necessity of this new arbitrary tax assessment is difficult to comprehend. Such an
inconsistency between two legal provisions, coupled with an expansion of the tax
administration’s powers, presents three major challenges.
Firstly, the new arbitrary tax assessment procedure under Section M3 of the GTC creates
significant legal uncertainty for taxpayers. Indeed, paragraph 2 of this section specifies that
the formal notice may be communicated by any means of public communication deemed
appropriate by the tax administration. As a result, the taxpayer is left at the mercy of the
tax administration, which can arbitrarily decide the means of notification of the formal notice
to declare, acting as both judge and party in the fiscal arena. Furthermore, the use of the
adverb “notably” in listing the means (press, public postings, and dissemination on a
designated website) clearly shows that the list is not exhaustive. Consequently, the
administration may resort to other means of notification at its discretion, even if such means
are not provided for by law. Although notification by public communication is not exclusive
of individual notification as indicated in the implementing circular of the Finance Law, this
approach places the taxpayer in an uncomfortable and precarious position for several reasons.
In particular, the text remains silent on the location for the formal notice that triggers the new
arbitrary tax assessment. Should we understand that the notification of a taxpayer located in
Douala could be published in Yaoundé, to that taxpayer’s detriment? Moreover, the phrase “designated website” is very vague and imprecise, leaving taxpayers in great uncertainty as
neither the law nor the circular specifies which website is intended. All this raises serious
questions, especially when considering that Section 13 of CEMAC Directive No. 0120/25-
UEAC-622-CM-42 on the Community Fiscal Procedures Book (CFPB), issued by the
CEMAC Commission on October 11, 2024, strictly enumerates the means of communication
that the tax authority can use and which are different from those of Section M3, paragraph 2
of the GTC.
The second issue posed by the new arbitrary tax assessment procedure introduced by Section
M3 of the GTC is its inconsistency with the procedure provided in Section M29. Specifically,
the first paragraph of Section M3 states in its second paragraph that a taxpayer who fails in
their declaration obligations has seven (07) days from the receipt of the formal notice to
regularize his situation. That same paragraph further states that if no response is received
within this period, the tax bases will be determined arbitrary by the tax authority under the
conditions of Section M29 and following of the GTC. However, Section M29 of the GTC
specifies that the arbitrary tax assessment procedure is only applicable when the taxpayer has
not regularized his situation within fifteen (15) working days following the receipt of a
reminder letter serving as a formal notice. There appears to be a genuine overlap of rules
governing arbitrary tax assessment, creating confusion for taxpayers and leaving them in a
deadlock. Faced with a formal notice from the tax authority, should a taxpayer regularize his
situation within seven (07) days from the receipt of the notification as stipulated in Section
M3, paragraph 1, or should he observe the fifteen (15) working days deadline outlined in
Section M29? This question is of great significance because the failure to respond within the
prescribed deadlines triggers arbitrary tax assessment. Is it not high time to harmonize these
deadlines for better protection of taxpayers?
Finally, the new arbitrary tax assessment procedure raises the issue of the unconstitutionality
of Section M3 of the GTC, insofar as it grants the tax administration the power to notify
formal notices at its sole discretion. Though, section 26 of the Cameroonian Constitution
states that taxation is a matter of law. This means that the creation of taxes and duties, the
determination of the tax base, rates, and collection modalities including the determination of
the means for notifying formal notices to declare, fall exclusively within the competence of
the legislature, without the possibility of delegating such authority to the tax administration.
The legislature should have exhaustively defined the various means of communication
between the tax administration and the taxpayer. By giving the administration the power to
choose the means of communication it deems it appropriate that, the Cameroonian tax
legislature has violated the constitutional principle of the legality of taxation. Moreover, such
an attribution of power contravenes the principle of separation of powers enshrined in the
Cameroonian Constitution. This breach of the supreme law could therefore provide a taxpayer
with grounds to challenge the unconstitutionality of Section M3, seeking to have its
application set aside in legal disputes in accordance with the principle of the hierarchy of legal
norms.
Conclusively, the new arbitrary tax assessment procedure resulting from the 2025 Finance
Law raises three major issues: legal uncertainty for the taxpayer, inconsistency with the existing arbitrary tax assessment procedure, and its unconstitutionality. These ambiguities and
contradictions are detrimental to taxpayers in multiple respects and undermine the respect for
their rights. It is therefore imperative for the tax authority to suspend the implementation of
this procedure and for the legislature to consider revising Section M3 of the GTC to
harmonize its content with that of Section M29 of the GTC and Section 26 of the
Constitution. This would undoubtedly contribute to improving the business climate and
consolidating the state governed by the rule of law.
Authors: Yves Bertrand Abena, Tax & Legal Consultant,
Supervisor: Albert Désiré Zang, Managing Partner