Alcohol tax increase and price hike takes effect

Consumers of alcoholic beverages in Cameroon will henceforth have to dig deeper into their pockets to pay for what they consume.

This was revealed in an advisory note made available to The Journal by the General Directorate of Taxes following a release from the ministries of finance and that of commerce. The department however outlined reasons for the new tax and on whom the burden will fall.

The release states that the tax is imposed on products considered to be detrimental to the health of consumers. These include alcoholic beverages of various categories, sweet drinks, tobacco and related products.

Consumers of these products would henceforth contribute to government coffers so that public services that handle illnesses resulting therein can be financed.

The tax, the release says, would be based on the quantity of the product sold or consumed, its quality and its alcoholic content.

Before now, Cameroon operated a proportional tax of 25 percent on these products but after the tax reforms, government opted for a mixed tax regime which is closer in line to what is recommended by International institutions, especially the WHO – World Health Organisation, the release further stated.

The new tax that went operational on February 16 is also aimed at discouraging people from consuming alcohol and tobacco. “The idea behind the tax is the realization that the more one consumes these products, the more likely his health is endangered."

The General Directorate of Taxes then went ahead to specify what is payable exactly on what is consumed. Here, a 65cl bottle of beer will witness an increase in price of 75 francs while a 33cl bottle will attract a tax of 37.5 francs.

A bottle of mild hot drink of 50cl will attract a tax of 75 francs while local wines of 75cl content will attract a tax of 300 francs.

Meanwhile, a 75cl bottle of Wine of high quality will witness an increase in price of 2,000 francs. Also, a bottle of locally produced whisky of 75cl will witness an increase in price of 500 francs. A bottle of high-quality whisky of 75cl will have its price raised by 3,000 francs.

Whisky in plastic bags, popularly called ‘fighter,’ will have 100 francs added to the present price. Low-quality Champagne in a bottle of 75cl will cost 2,000 francs more while a bottle of high-quality champagne of the same quantity will cost an additional 4,000 francs.

The explanatory note stated further that article 8 of the new law bars businesses from raising prices beyond what is specified. “Irrespective of the beer brand consumed, an addition will not exceed 100 francs for a 65cl bottle and 50 francs for a 33cl bottle of beer."

The release finally disclosed that the new prices were arrived at, after consultation between the government on the one hand and operators in the beer sector and representatives of consumer associations on the other hand.