ABSTRACT

This study aims at “Analysing the Administration of Value Added Tax in Cameroon”. Its specific objectives are to assess VAT’s relevance in revenue generation, savings and consumption of the consumers and to identify the main problem that hinders the practice of VAT in Cameroon. The selected businesses here are businesses in the secondary and tertiary sector in Buea which will cover state tax collecting and administering offices, businesses paying VAT (tax payers) picked randomly such as book venders’, shoe vendors’, saloons, bakeries, poultry vendors, restaurants, hotels, financial institutions, provision stores and super markets which constitute the managers, owners, store keepers, accountants, cashiers and other employees of these businesses that provided relevant information for the research. Primary data was collected with the use of 40 questionnaires that were answered by managers, owners, store keepers, accountants, cashiers and other department staffs of the target businesses. Frequencies and percentages were used to analyze data through SPSS and Microsoft Excel and the results were presented on tables, bar charts and pie charts.

The findings indicate that VAT economically does encourage investment by providing a refund for a tax paid on inputs and encourage export by zero rating items exported. With the very concept of VAT, output tax is charged at each stage of production and distribution to ensure that only final consumption is exposed to be taxed as is obvious that when there is tax on the consumption of the goods and services, people are not consuming large amount of goods and services (their consumptions are decreasing) and many of their income goes to savings.

The study also found that the main drawbacks that hinders the administration of VAT in Cameroon are lack of awareness and deliberate resistance not to comply with the VAT laws of the business community, absence of sufficient materials and skilled manpower, the negative attitudes of some business societies towards VAT, tax evasion, weak purchasing powers of the society forcing to search goods and services that exclude the value of VAT from its price, poor relationship between the tax payers and tax officers and low remuneration of the tax officers. Therefore, the study thus recommends that Cameroon tax Authority has to build its administration capacity on both human and material resources to carry out its duties and responsibilities effectively and efficiently. This can be maintained through hiring of more qualified employees, provision of consistent training and development for staffs. Who will join and who have joined and using advanced information and communications technology so as to improve its administration capacity and control those on compliance VAT payers.

Key Words: Value Added Tax