Government announces tax exemption for locally produced flour
By Stephen TADAHA
The Government in its 2025 finance law approved the complete removal of Value Added Tax (VAT) for locally produced flour to curb import. Initiated in 2024 for plantain and potato flour, the tax measure now extends to corn, cassava and sweet potato flour and took effect on January 1, 2025.
According to the Directorate General of Taxes, this will contribute to the “promotion of the import-substitution policy”.
Many local flour producers in Cameroon have seen this VAT removal as an opportunity to reduce prices of finished products. The removal of VAT on local flour also reduces production costs.
“I hope this will really be applied and if yes, it will boost the production of bread locally made for example and why not reduces its prices” Merlin a local bread producer in Mbouda told CNA.
“We learned of the news but we expect it to be seen on bread prices” Elodie, a consumer still in Mbouda said. “The removal of VAT will instead be advantageous to producers, why should government not reduce local bread prices?” She questioned.
The 19,25% VAT exemption on local flours would also deprive the State of Cameroon of a base estimated at about FCFA 10 billion. According to the Taxation Department, this will reduce the import of wheat, a cereal which remains one of the most imported food products in Cameroon and represents nearly 4% of the overall import expenditure each year.
According to the National Institute of Statistics, Cameroon spent FCFA 178.3 billion (3.6%) to buy wheat in 2023 after spending about FCFA 260.7 billion in 2022. In terms of production, the country produced 12,800 tons of local flour in 2024 as a result of the implementation by the Ministry of Agriculture and Rural development, of the 2024-2026 Integrated Agro-Pastoral and Fisheries Import-Substitution Project (Piisah).
Although there is improvement compared to previous years, the country is far from its goal of 5 million tons of quality local flour by 2030. However, government is implementing policies to strengthen production as well as industrial processing capacities through the construction of 150 units for processing cassava into flour and three units for processing plantain into flour in the localities of Mvamgan in the South, Dimako in the East and Bangem in the South West Region
