Over the first six months of 2023, Cameroon lost a total of CFA8.6 billion in customs revenue due to the implementation of its Economic Partnership Agreement (EPA). This represents an increase of 61% compared to the same period in 2022, according to data provided by the Directorate General of Customs.
This significant loss is the result of the acceleration of tariff reductions between the two partners. Phase 7 of this process began on August 4, 2022, with a 30% reduction in customs duties for 3rd group products, known to have high fiscal yield. This group includes among others utility vehicles, fuels, motorcycles, and cement, as listed by Cameroon and the EU.
In addition, during this 7th phase, which concluded on August 3, 2023, the rate of tariff dismantlement for products in the 1st group remained at 100%, as it has been since 2019. Meanwhile, the dismantlement rate for products in the 2nd group accelerated to 90%.
Losses are forecasted to intensify in H2 2023 following the implementation of phase 8 of tariff dismantlement on August 4, 2023. Since that date, goods imported by Cameroon from EU countries are eligible for preferential import tariffs, with dismantlement rates set at 100% for products in the first group, 100% for products in the second group, and 40% for products in the third group.
Tax relief
As a reminder, the first group products, whose tax reduction was launched on August 4, 2016, at 25% per year, include pharmaceutical products, fertilizers, pesticides, metal, paper and cardboard, bitumen and other petroleum residues, soda, gypsum, chalk, lime, gas, inorganic and organic chemicals, computers, specialized-use motor vehicles, tractors, parts and accessories for motorcycles, bicycles, and wheelchairs, laboratory equipment, etc. Tariff dismantling on these products has been completed at 100% since August 4, 2019.
For products in the second group, whose tariff dismantling began on August 4, 2017, at a depreciation rate of 15% per year on the applicable customs duty, the government wants to promote local production. Tariff dismantling has reached 100% since August 4, 2023. The products in this group include plaster, lime, marble, clinkers, inputs for the food industry (fragrance mixtures for the food or beverage industry, yeast, etc.), wire rods, power generators, and rotary electric converters, machinery and appliances, motor vehicles for the transportation of goods (trucks, etc.), trailers and semi-trailers, wheelbarrows, certain parts and accessories for vehicles (bumpers, belts, brakes, wheels, clutches).
The third group includes the high fiscal yield products mentioned earlier. The reduction rate of customs duties on these products is currently 10% per year and is expected to reach 100% by 2030, per the official timetable.