Central Africa – EU Partnership Accord:

Louis Paul MOTAZE

Central African countries not very sure about tax lifting

If they respect the deadline of 4 August 2016, they would lose hundreds nay thousands of billions of FCFA which would be more than perilous to their different economies.

By EssanEkoninyam in Yaounde

The date of the entry into force of the lifting of customs duties and other taxes on goods within the framework of the Central Africa – EU Economic Partnership Accord is 4 August 2016. As the deadline approaches, countries of the Central African sub-region are ill at ease and are calling desperately for its postponement. 

According to the members of the regional coordination committee of negotiations for the Economic Partnership Accord (EPA) for Central African countries, countries of the sub-region are not yet ready for this exercise which appears suicidal for the economies of the countries and which can endanger what the regional integration process has achieved so far.

                The ministers of the sub-region who met in Douala on 17 June 2016 within the framework of the 14th session of the ministerial committee of EPA negotiations are also of this view. Analysts therefore hold that it is in their best interest as well as that of members of the regional coordination committee mentioned above to delay the deadline.

In case the regional EPA is not concluded on the said date, Cameroon alone would qualify for this stage next August. A Cameroonian member of the regional coordination committee, who spoke on conditions of anonymity, said they want to do everything for Cameroon to not commit the error of implementing the lifting of taxes. “It would be fatal for the country,” he pointed out, “if it dares tread on this path next 4 August.”

                It is the view of the committee members that the losses to be registered by the member countries would be estimated at hundreds nay thousands of millions of FCFA if they get to the stage of lifting the taxes. Globally, they say, the countries of the sub-regions would lose a total of 4 414 billion FCFA, which is an annual average of 294 billion FCFA for all the countries.

                The fiscal loss on tax revenue for importation would be a little higher, for it would come up to 4 791 billion FCFA. As a result of the volume of import coming from EU countries, DRC (36% of the net regional fiscal impact), Cameroon (22.8%), Gabon (18.3%), and Congo (15.4%) would register a 92.5% net regional fiscal loss.

                Said Pierre Moussa, president of the Cemac Commission and negotiator-in-chief of the EPA at the opening of the 14th session of the ministerial committee for EPA negotiations: “All studies carried out in the region show that without accompanying measures, the opening of our markets would render our economies more vulnerable, for the five least advanced countries, but also for the others which are on the verge of experiencing the most severe economic crisis ever witnessed in the region.”

                Negotiations are thus going on amongst the different parties on two main points. First is the degree of opening trade in conformity with the article on essential trade exchanges, on the one hand, and on the other, the putting in place of accompanying measures of the EPA which consist of two levels, that is, the reinforcement of production capacities and upgrading of companies, and the compensation of net fiscal losses caused by the lifting of taxes.