Cameroon Introduces Sweeping Immigration Reforms in the 2023 Finance Law in the Form of Increased and New Taxes and Stamp Duty

By Jacob Akuo

International Trade & Investment Lawyer

On December 27, 2022, Cameroon passed the 2023 Finance Law. Just like every finance law before it, its main purpose is to determine government revenue and expenditure, lay down the conditions of budgetary and financial balance and establish the State budget for 2023.

The 2023 Finance Law is particularly significant because it is drawn up by legislators in the wake of global inflation and the fears of a recession in 2023 due to the compounding effects of the COVID 19 pandemic that led to the disruption of global supply chains around the world, as well as the Ukrainian war that led to an increase in energy prices aside from the dire grain shortages.

The increase in energy prices means that the government has had to heavily subsidize and shore up the energy sector to reduce prices at the pump as well as cooking gas (propane). Food and grain importers have also been greatly incentivized to maintain supply levels and reduce prices. This has predictably resulted in increased government spending.  The government has had to borrow from local and international financial markets and development banks to finance its spending. The screws are tightened by the fact that, the government’s borrowing has come at a higher cost than usual following a global increase in interests rates by core central banks as a counterweight to hiking inflation.

Faced with these economic realities, the government has had to dig deep inside to get increased domestic revenue to fund itself. In the 2023 Finance Law, they have done so by putting in place a number of new revenue streams as well as increasing certain existing taxes and stamp duty.

Some of these sweeping tax reforms relate to immigration, that is, the entry, stay, work, and exit of foreigners in Cameroon. We have seen unprecedented increases in fiscal stamps, stamp duty for entry visas, exit visas, residence permits and exit visas. The government has also imposed taxes on work permits (work visas) that were until 2023 free of governmental fees and taxes. It should be mentioned that, all of these new taxes took effect from January 01, 2023, and will be highlighted below.

1. Reforms regarding taxes (stamp duty) on entry visas and exit visas.

For some context, the law that applies to entry, stay, and exit from Cameroon is Law No. 97/012 of 10 January 1997 (amended by Law No. 2022/015 of July 14, 2022). The conditions for the application of this law is itself laid down by Decree No. 2007/252/PM of 2007. These texts are hereinafter referred to as the “Immigration Law”.

The Immigration Law provides for four categories of entry visas to Cameroon to wit:

• transit visas (maximum validity of five days);
• tourist visas (maximum validity of thirty days);
• temporary visas (maximum validity of three months); and
• long-stay visas (minimum validity of more than three months and maximum validity of not more than six months).

On the other hand, the Immigration Law provides for the following categories of exit visas:

• Single exit visas;
• The exit visa for the outward and return journey;
• The three months exit visa; with multiple exits and entries.
• The six months exit visa; with several exits and entries.
• One year exit visa with several exits and entries.

For purposes of clarity, exit visas are granted to holders of Cameroonian residence permits or resident cards who intend to travel out of Cameroon during the validity of their permit or card[1]. They are also granted following expiry of such a card/permit; or to any foreigner whose entry visa to Cameroon has expired while he is still within Cameroonian territorial borders.

Having laid out the context above, let us consider how the 2023 Finance law has drastically reformed the taxes (stamp duty) that apply to these visas.

For starters, taxes for the aforementioned entry and exit visa categories are provided for in section 548(2) of the General Tax Code. This section has now been amended by the 2023 Finance Law and updated in the 2023 General Tax Code.

The old section 548(2) contained in the 2022 General Tax Code (and previous general tax codes) provided for stamp duties for entry and exit visas as follows:

• XAF 50 000 for entry visa;
• XAF 50 000 for simple return visa.
• Visa for multiple entries and exits valid for:
  • three months 50,000 CFAF;
  • six months 100,000 CFAF;
  • twelve months 150,000 CFAF

The visa categories mentioned in section 548(2) of the General Tax Code closely reflect the entry and exit visa categories in the Immigration Law and were implemented by various diplomatic missions and frontier police accordingly.

In contrast, the new section 548(2) provided for in the 2023 Finance Law has brought in two main innovations. The first one is, it eliminates all of the aforementioned categories in the old section 548(2) which itself was reflective of the Immigration Law. It now simply classifies visas into two broad categories for stamp duty purposes:

• visas for multiple entries and exits for up to six months. This visa category will ostensibly encompass entry visas such as the transit visa, the temporary visa, the tourist visa and the long-stay visa; as well as exit visas such as the single exit visa, the return exit visa, the three months exit visa, and the six months exit visa; and
• Visas for multiple entries and exits valid for more than six months. This category seemingly encompasses the one-year exit visa although the Immigration Law does not provide for a category of an entry visa valid for more than six months.[2]

The second innovation is that the new section 548(2) provides for the option of a normal application and an express application for a visa. The 2023 Finance Law fails to define these terms.

Under section 31 of the Immigration Law, a visa application must be granted within a statutory timeline of 48 hours from the date of application. Where the application is refused, the decision must be communicated to the applicant within 24 hours. With the Finance Law and the Immigration law not defining normal application, it is safe to presume that section 31 of the Immigration Law applies to normal application.

On the other hand, an express application which is not defined by the Immigration Law or the new section 548(2) which provides for it can safely be presumed to mean a visa application granted in less than the statutory maximum of 48 hours.

As regards the taxes for these visas, the new section 548(2), provides for the stamp duty for these visas as follows:

• For visas of multiple entries and exits for up to six months, the stamp duty is now set at XAF 100 000 for normal application, and XAF 150 000 for express application.
• For visas of multiple entries and exits for more than six months, the stamp duty is now set at XAF 150 000 for normal application and XAF 200 000 for express application.

From the above analysis, one would note that, all visas (whether entry or exit visas) with a validity of three months or below have seen a 100 percent increase in stamp duty for normal applications, from the standard XAF 50 000 stamp duty to XAF 100 000 stamp duty. Express applications for these same visas (which is not an obligation) will mean a 200 percent increase in stamp duty.

Visas valid for six months and above have seen no increase in their stamp duty rate. That said, when it relates to an express application which is not obligatory under the law, we see a 50 percent increase for visas with a validity of six months, and 25 a percent increase for visas with a validity of more than six months and up to one year.

2. Brand New Taxes (fees) on Work Permits (work visas)

Work permits or work visas are governed by the Labour Code and its implementing texts. Basically, work permits in Cameroon are work contracts entered into between an employer and a worker of foreign nationality which are visaed by the Minister of Employment and Vocational Training. These contracts are fixed term contracts which cannot be valid for a period of more than two years renewable.

Decree No 93/575/PM of July 13, 1993, provides mandatory information that must be entered in these contracts as well as the documents that should constitute the dossier of application for a visa of Minister of Employment and Vocational Training.

The 2023 Finance law has brought in further requirements in the form of fees relating to work visas. It should be emphasized that, before 2023, there was no governmental fee or tax during application, or the grant of work permits or work visas to foreign workers.

That all changed in the 2023 Finance Law. Under Section 22 of this Law, a new tax or fee has now been instituted for work permits or work visas applied for by all natural persons of foreign nationality who take up an employment contract in Cameron.

Section 22(3) provide for the fees to be paid to the State coffers as follows:

• For work permits of non-African workers, the fee is the equivalent of two months of wages and gross salary of the worker;
• For African workers, the fee is the equivalent of one month of wages and gross salary of the worker, with a 50% reduction.

On January 06, 2023, the Minister of Employment and Vocational Training issued Circular N° 000001/LC/MINEFOP/SG/DRMO specifying the conditions for the application of Section 22 of the 2023 Finance Law.

The notable thing in this Circular is the definition of the gross salary mentioned in Section 22(3) as well as the evaluation of gross salary. Gross salary is defined broadly to consist of all bonuses, allowances and other benefits in kind enjoyed by the foreign worker in the course of his professional activity in Cameroon.

The Circular obliges employers to state these benefits in numerical terms within the contract of employment of a foreigner. It goes further to provide that, where applicable, the evaluation of these benefits will be carried out by the competent services of the Ministry of Employment in accordance with the regulations in force.

In summing up, the Circular provides that, in application of the regulations in force and notwithstanding the possible inclusion of bonuses and allowances in the evaluation of the gross salary of a foreign worker, all employers must, under pain of rejection of their applications for work visas for non-conformity with the regulations in force, mention in the employment contract of foreign workers, the transport and accommodation allowances, in accordance with the relevant provisions of Decree N°. 93/573/PM of 15 July 1993 and Order N° 18/MTPS/SG/CJ of 26 May 1993.

Despite the fact that the government justifies these new measures as an opportunity to make Cameroonian labour more competitive to foreign labour within the Cameroonian market in order to achieve economic emergence by 2035, these measures are arguably also very onerous for businesses who employ foreign workers. This will particularly be the case for businesses that employ Western expatriate staff who are traditionally known to earn very high salaries, bonuses, and benefits. Locals will have to be prioritized by these businesses to cut cost. How this will affect quality and productivity is yet to be tested.

3. Reform on taxes (stamp duty) on residence permits and residence cards.

Under the Immigration Law, there are two types of residence titles in Cameroon: a residence permit valid for two years; and a residence card valid for ten years.

The residence permit is granted to holders of long stay visas who are either students, contractors with the State of local council, foreign employees, etc and their unemployed spouses, descendants and in some cases, ascendants.

On the other hand, to get a residence card, you must have been residing in Cameroon for an uninterrupted period of six years. In other words, to qualify for a residence card, you must have been granted a residence permit on three consecutive occasions.

Having said that, both permits are subject to payment of stamp duty provided for under section 549 of the General Tax Code. This section has now been amended by the 2023 Finance Law and the stamp duties have been increased substantially in some cases.

The old section 549(2) of the General Tax Code (2022 and preceding) provides for the following stamp duty for residence permits valid for two years:

• XAF 30 000 for residence permits issued to students:
• XAF 60 000 for residence permits issued to foreign workers under contract with the state or a local council and to unemployed spouses;
• XAF 120 000 for residence permits issued to nationals of African countries and renewal thereof:
• XAF 250,000 for residence permits issued to nationals of non-African countries and renewal thereof.

The new article 549(2) revised by the 2023 Finance Law and incorporated in the 2023 General Tax Code has increased the abovementioned stamp duties as follows:

• XAF 50 000 for residence permits issued to students. This is a 40 percent increase from the XAF 30 000 stamp duty that was applicable in 2022;
• XAF 75 000 for residence permits issued to foreign workers under contract with the state or a local council and to unemployed spouses. This is a 20 percent increase from the XAF 60 000 stamp duty that was applicable in 2022;
• XAF 150 000 for residence permits issued to nationals of African countries and renewal thereof. This is a 20 percent increase from the XAF 150 000 stamp duty that was applicable in 2022;
• XAF 300 000 for residence permits issued to nationals of non-African countries and renewal thereof. This is a 67 percent increase from the XAF 250 000 stamp duty that was applicable in 2022[3];

On another note, the old section 549(3) of the General Tax Code (2022 and preceding) provides for the following stamp duty for residence cards valid for ten years:

• XAF 60 000 for residence cards issued to members of duly recognized religious congregations, to unemployed spouses or minor dependent children of expatriates as well as to expatriate spouses of Cameroonians who have maintained their nationality of origin;
• XAF 250 000 for residence cards issued to nationals of African countries:
• XAF 700 000 for residence cards issued to nationals of non-African countries.

The new section 549(3) revised by the 2023 Finance Law and incorporated in the 2023 General Tax Code has increased the abovementioned stamp duties as follows:

• XAF 75 000 for residence cards issued to members of duly recognized religious congregations, to unemployed spouses or minor dependent children of expatriates as well as to expatriate spouses of Cameroonians who have maintained their nationality of origin. This is a 20 percent increase from the XAF 60 000 stamp duty that was applicable in 2022;
• XAF 300 000 for residence cards issued to nationals of African countries This is a 67 percent increase from the XAF 250 000 stamp duty that was applicable in 2022;
• XAF 750 000 for residence cards issued to nationals of non-African countries. This is a 67 percent increase from the XAF 750 000 stamp duty that was applicable in 2022.

In conclusion, the aforementioned reforms in the 2023 Finance Law took effect from January 01, 2022. As a business or employee intending to enter the Cameroon market or already doing business the Cameroon market, these are reforms that should be borne in mind in order avoid more penalties and draconian fines for violation. At Dayspring Law Firm, we are at the forefront of immigration practice in Cameroon and provide bespoke immigration services to both employers and employees who are involved in the Cameroonian market. We assist with entry visas, work visas, residence permits and exit visas for employers and their employees as well as their relatives.

Access more resources on Cameroon immigration law by clicking here, here or here.

[1] French and American citizens are exempt from exit visas.

[2] In practice, Cameroonian diplomatic missions and consular offices do grant one year entry visas to foreigners, though the Immigration Law does not specifically contemplate this type of entry visa.

[3]Due to a Convention with France, right up to 2022, French citizens pay XAF 200 000 stamp duty instead of XAF 250 000 that was paid by citizens from other countries. It is still unclear how this Convention will apply following this increase.