Indirect tax reforms and revenue mobilization in Cameroon

As most developing countries strive to achieve Economic growth and development, it has been quite a challenging issue to attain a balance in their fiscal policy management. Most of these countries have faced a prolonged (persistence) budgetary deficit caused by the increasing growth in their public expenditures more than in their incomes. The most important puzzling question has been why is there a slow revenue mobilization in developing countries? It was realized in the mid 1980s by the World Bank studies that this slow revenue growth has been due to their poor fiscal design policies. Hence according to the Ahwad and Stern (1991), SAP design for developing country’s tax reforms was accorded a top priority. Meanwhile Sohota (1961) earlier pointed out the role of tax reforms as one of the important and a major ingredient to economic development of a nation. Cameroon in Sub Saharan Africa faced this problem in mid of 1980s. The country was not only heated by a recession but faced a prolong budget deficit problem from 1986-1994. Since 1990 two major tax reforms were implemented in 1994 and 1999 to restructured the country‘s tax policies for revenue mobilization in order to overshadow the deficit scenario. It is rather unfortunate that since the reform package were implemented; there has been little or no work done so far to assess the success or influence of the reforms on indirect tax revenue raising capability. It is this challenge or knowledge gap that I was motivated to cover in this piece of work. Due to the large scope of taxation, this issue of tax revenue mobilization is restricted only to the indirect tax reform in Cameroon. The major pre-rogatives of this work involve; -An exposition of the indirect tax structure of Cameroon and the trends of tax revenue growth. -To investigate if the tax reforms did improve the initial tax revenue situation or rather helped to engineer the response of the tax system to changes in the tax bases for the purpose of raising sufficient revenue requirement for the economy. -To ...