Curbing capital flight:

Gov’t slams huge taxes on money transfers abroad, customers lament

People living in Cameroon can now only receive but not send money out of the country through the recognised money transfer agencies such as Western Union, Express Union and Money Gram. This is because of the huge taxes that have been levied for international money transfer services, especially for ‘sending’ transactions.

                Many service users say it is an embarrassment to them because of the indispensability of the service. A father we met in one of the money transfer agencies told us that his son living in the USA needed money urgently for academic purposes but he is unable to make a transfer to him. We equally found cases of people who wanted to foot health bills for patients abroad and others who had business transactions to carry out but could not.

                We did not however succeed to get officials from government and money transfer institutions to react to the situation. However a dependable inside source who did not want to be named told us that a 30 percent increase in the charges for transfers from Cameroon abroad might be considered too burdensome for customers. He said government perhaps in its desperate bid to finance the colossal 2017 budget has decided to increase taxes for vital and indispensible sectors. But the source said the measure is very burdensome to service users and detrimental to the money transfer institutions that will certainly loose customers.

                “Government has increased taxes for money transfer by 30 percent and is making a profit of 20 percent and just 10 percent for the financial institutions carrying out the transactions. The profit was 50-50 when the charge was 20 percent,” explained our source, who noted however that “nonetheless, people are still receiving money from abroad without any problem.”

                It should however be understood that the motivation of government is to tax the rich and discourage capital flight, apart from widening the tax base. Needless to say that only the rich have the means to send money abroad.

                 As we went to press yesterday, we could not confirm allegations that some money transfer institutions are planning to suspend transfer services to foreign countries.

                Cameroon’s leading money transfer company, Express Union, though well planted in the Cemac sub-region, is not well planted in the EU and America.

                The government measure which favours money transfers into and not out of Cameroon can be understood given that remittances from the diaspora not only impact positively on the socio-economic development of the country they also enormously contribute to the country’s GDP.