Eradicating corruption in Cameroon: Case of the Directorate General of Taxation (DGT)

Introduction

The fight against corruption is the main focus of Cameroonian public administrations. According to section 134 paragraph 1 of the Cameroon Penal Code, any national, foreign or international public official or civil servant who, for himself or for a third party, solicits, approves or receives offers, promises, gifts or presents in order to do, refrain from doing or postpone an act in the performance of their duty, is deemed corrupt or punished as such.” ( 1 ). Paragraph 3 of the same article punishes any person who “requests or accepts reward in cash or in kind for themselves or for a third party, as a remuneration for an act already accomplished or a past abstention ” (Ibid.).

With a view to curbing the rise of acts of corruption, the Cameroonian government has set up several bodies to restore transparency in the management of public finances. Among the best known, there is the National Anti-Corruption Commission (CONAC) established by Decree No. 2006/088 of 11 March 2006. It is responsible for monitoring and evaluating the government plan to fight against corruption; the National Agency for Financial Investigation (NAFI) established by Decree No. 2005/187 of 31 May 2005. It is responsible for preventing and combating money laundering and finally the Supreme State Audit Office (CONSUPE), whose services were established by Decree No. 2013/287 of 4 September 2013, with the general mission, the audit of public finances.

In addition to these institutions with general competence, strategies have been developed within some public structures to fight against corruption. It is the case of the Directorate General of Taxation (DGT), which has implemented a strategy of “de-materialization of tax procedures” called the “ All Digital ” policy (2 ), for it is based on the potential of Information and Communication Technologies (ICT).  It has two objectives: to optimise and secure revenue by improving tax compliance and to improve relations between tax officials and taxpayers. With a view to analysing the scope of this strategy, we will be considering it as a relevant response to the fight against corruption at the DGT (I) and analysing the obstacles to its implementation (II).

  • The de-materialization of tax procedures as a response to the fight against corruption at the DGT

Speaking about the de-materialization of tax procedures within the DGT, the Director General of this institution stated during an interview that “Until 2013, almost all tax procedures were manual, be it registration, declaration, payment or even access to tax services such as the issuing of documents ” ( 3 ). Prior to this date, the DGT had put in place several strategies to clean up the tax administration, which was then regarded, rightly or wrongly, as “ a bad wolf ” ( 4 ).

The first one was that of specialization in the management of tax operations. The objective was to establish fiscal discipline that made it possible to adapt tax services to the needs of businesses (Personal communication 2024). The lack of specialized services enabled crooked agents to reduce a company’s taxes in order to collect dividends. In addition, this specialization enabled tax agents to bring out of hiding a number of companies that were not meeting their tax obligations. It is in this vein that, the Large Taxpayer Office (LTO) was created in 2004, with the responsibility of monitoring and collecting taxes from the country’s 400 largest companies ( 5 ). To increase its efficiency, the LTO established the one-stop shop, which not only simplified procedures but also reduced the risks of corruption (Ibid.). Specialization continued with the establishment in 2005 of structures dedicated to the management of medium-sized businesses. These are the Medium-sized Tax Offices (MTOS), whose ambition was to bring several companies registered under this category out of hiding. The direct consequence was the increase in the number of companies in compliance with the tax system, from nearly 3,000 medium-sized enterprises in 2010 to 10,000 in 2013 and therefore the increase in public revenue (Ibid.).

In December 2013, the DGT broke up the MTOs, two in Yaoundé and three in Douala, to set up Pilot Centers which were to gradually lead to a change in the method of payment of taxes (Personal communication 2022). We had to wait for the 2021 Finance Act to observe a real maturation of measures to secure public revenue. It is in fact prohibited “any payment of taxes in cash to the tax network ” ( 6 ). The year 2021 therefore constitutes the beginning of a new tax era in Cameroon. Teleprocedures are required by both users and tax agents. Two applications have been developed by the DGT to regulate electronic declarations and the tax rights of taxpayers. These are FISCALIS and MESURE (Better Monitoring of Tax Yields). The first enables a taxpayer to fulfil their tax obligations, that is to say, to declare (Value Added Tax (VAT), Income Tax (IT), Corporate Tax (CT), salaries and wages deductions (SWD), Public orders, land tax, forestry tax, mining tax and others). It therefore permits automatic and remote management of taxpayer declarations ( 7 ). The second enables a taxpayer to benefit from some of their tax rights, if the latter fulfils all the related conditions, namely the tax clearance certificate and the request for reimbursement of the VAT credit ( 8 ).

The repercussions of this de-materialization are numerous. It allows both “a saving of time and money and a rationalization of the system” (Roemer 2016). More explicitly, it reduces the physical contacts that took place with MTOs, LTOs and other tax institutions and which were the source of administrative delays and all kinds of financial embezzlement. Thus, thanks to the introduction of teleprocedures, teledeclarations and telepayments, the DGT collected 638.7 billion FCFA in the first quarter of 2022 in January, an increase of 20.8% over one year ( 9). This financial gap sufficiently demonstrates the negative impact that manual tax procedures generated on the mobilization of public revenue.

  • The obstacles of dematerialization as sources of resistance to the phenomenon of corruption at the DGT

As many public policies, the implementation of de-materialization faces some pitfalls. These limits have a significant impact on the fight against corruption within the DGT. The first limitation is of a technical nature, it concerns the computer bug linked to the design defect of the computer programs developed by the DGT. Some taxpayers and tax agents deplore the slowness of the network, as well as the dysfunction of FISCALIS and MESURE applications developed to facilitate dematerialization (Personal communication 2024). These applications are particularly characterized by the absence of harmonization of databases (files), coupled with an absence of tax bases (turnover, rent) (Personal communication 2024). Mesure, especially, presents functional and technical inadequacies which required in 2018, a call for expressions of interest with a view to integrating its upgrade into the central and decentralized services of the DGT ( 8 ). All these limits push tax agents to re-establish physical contact with taxpayers.

In addition, there is the poor training of tax agents in de-materialization procedures. Interviews carried out within the Divisional Tax Center (DTC) revealed that the training period in the use of teleprocedures was short, and several tax agents did not have personal computers to facilitate the practice. The few computers provided by the DGT were largely insufficient compared to the staff. To this must be added the poor internet connection in some offices. (Personal communication 2024).

The third limit is cyclical: the inequality between the rate of tax issuance and the rate of payment when taxpayers pay their taxes. In other words, some taxpayers fail to pay many of the taxes they declare. The implication is that dematerialization does not yet include measures to deal with insolvent taxpayers. Consequently, the tax authorities use other mechanisms to encourage them to meet their payment rates, notably the Notice of Collection (AMR), which generates additional costs. This strategy requires the physical presence of a tax agent on the site of the company in question, and logically re-establishes the physical contacts that are supposed to disappear with de-materialization.

Finally, the last limit is economical. The implementation of de-materialization is confronted with the low salaries of civil servants in general and tax agents in particular. Indeed, studies have demonstrated that corruption is developed when the agents concerned are poorly paid or when they have multiple opportunities to receive bribes (Quah, 1999). From this perspective, each flaw in de-materialization is an opportunity to recreate physical contacts in order to collect bribes.

Conclusion

The de-materialization of tax procedures is bringing a new era to the Cameroonian DGT. It effectively contributes to the gradual reduction of corruption within this institution whose contribution to GDP is one of the most important. However, several related measures must also be taken into account to increase and maintain its effectiveness. These include, among others:

  • Providing adequate IT equipment to tax agents to facilitate their digital activities (good internet connection, performant computers, etc.);
  • Regularly updating applications developed to facilitate de-materialization in order to reduce computer bugs;
  • Educating taxpayers to respect the tax de-materialization policy so as to reduce physical contact to what is strictly necessary;
  • Strengthening control of the tax adjustment of large companies to avoid double taxation and therefore unofficial negotiations which tarnish the reputation of the DGT.
  • Increasing the number of training sessions for taxpayers in on-line declaration procedures;
  • Intensifying taxpayers’ awareness of the registration of their economic activities;
  • Simplifying on-line taxpayer activation procedures because it is currently done by the Administration, which provides a breeding ground for corruption;

Improving the salaries of tax officials.

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Aboudi Vanessa is a Research Associate in the Democracy and Governance Division of the Nkafu Policy Institute. She holds a Master's degree in Political Science from the University of Yaoundé II and is particularly interested in governance and gender issues. She is the author and co-author of several articles published in national and international journals.

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