Withholding trust: Business taxpayers and the value-added tax in Cameroon

For more than two decades now, Cameroon’s most prominent private sector representatives have singled out the processing of value-added tax refunds as a serious hindrance to economic activity in the country. The dimensions of this problem and its intractability derive to a large extent from a feature of the tax system known as VAT withholding. The consensus is that VAT withholding allows the state to attain certain revenue levels by modifying the normal operation of VAT and entrusting tax collection tasks to public agencies and a select group of large companies. Withholding is thus seen as a device that, while not technically optimal, enables the tax authorities to cope with VAT-related administrative challenges that they are judged not to be ready to meet fully. This chapter supplements such an expert story by focusing on how withholding is premised on sorting businesses into taxpaying categories. In the process, commercial might and managerial standards are equated and couched in terms of civic morality. The result is a deeply discriminatory tax system that treats all but a small minority of businesses as untrustworthy.