In his circular letter N°001 of August 30, 2023 on the orientation of the 2024 budget, the President of the Republic instructed the introduction of green taxation.
It is in fact all the measures that contribute to the protection of the environment or to the reduction of the environmental and social impacts of economic and social activities. Nowadays, it is a requirement of sustainability (sustainable development) and of a governance qualified as (eco)responsible. Indeed, our generation has the responsibility to transmit a healthy environment to future generations. To do this, we must preserve it. The problem is that we can take this from two ends: either we introduce a new tax (coercive measure) for citizens who pollute (polluter pays principle which sends a price signal to economic actors), or tax breaks are granted to citizens who adopt a less/non-polluting mode of activity and consumption (promotion of an eco-attitude). In the Cameroonian context, it would be ineffective and irrelevant to opt for coercion. Here are the reasons:
surcharge
The President of the Republic has instructed to create new taxes to increase State revenue. However, I have already indicated that this can be done horizontally by increasing the number of taxpayers and not always vertically through the overtaxation of the few citizens who agree to remain in the formal sector. In this perspective, it is rather necessary to lower taxes, that is to say create a framework to encourage the maximum number of citizens to become taxpayers. The positive externality is the improvement of the business climate likely to favor the establishment at the local level of green businesses/industries. Instead of overtaxing the few industries that operate locally with polluting machinery (at the risk of pushing them into bankruptcy), the State can instead give 5 to 10 years of tax exemption on eco-investments in order to encourage them to renew their facilities without disrupting economic activity and without destabilizing consumption.
Promotion of eco-attitude
Pollution is very expensive for the State, especially in terms of public health. Eco-attitude is the awareness of the social and environmental consequences of each of our daily actions. We speak more and more of eco-citizen behavior or eco-gesture in reference to the gestures or behavior of citizens that help preserve the environment. If the State wants to encourage eco-attitude, then it gives fiscal and administrative advantages to eco-citizens. For example, everything related to renewable energy is zero-rated (solar plate, energy-saving light bulbs, wind turbines, biogas, compost, etc.). Clearly, this mechanism makes it possible to reduce taxes on ecological products and to increase taxes on polluting products. For example, biological products are zero-rated and chemical products are surcharged. The aim is to encourage citizens to opt for less/non-polluting products, the benefits of which are significant for public health and the environment. The mistake not to make is to indulge in the race to increase state revenue. It must be understood that what the State does not spend is a gain. There is no point collecting revenue and then spending it entirely on paying pollution bills.
Lack of means of control
Thus, if the State were to adopt coercive measures, then it would apply disproportionate and unjust measures. The eternal question would be to know what reliable tools it has to measure the level of pollution to be taxed. Indeed, the surplus is taxed: how would the State determine this surplus to be taxed? To date, the State of Cameroon is not equipped. It would therefore be difficult to apply a tax like the carbon tax in Cameroon (tax on carbon dioxide emissions, greenhouse gas). I’m afraid that’s the only tax that’s getting the government’s attention.
For my part, I insist on the need to give the eco-citizen the benefit of this green taxation. It is time to reward the citizens who make a lot of effort and sacrifice.
Louis-Marie Kakdeu, HDR, PhD & MPA
Membre du Shadow Cabinet SDF
Economy, Finance & Commerce
