AN ANALYSIS OF THE DIFFICULTIES IN ENFORCING TAX REFORMS TO ACHIEVE SUSTAINABLE GOVERNMENT REVENUE IN CAMEROON

CHAPTER ONE INTRODUCTION 1.1Background of the study Taxation remains one of the most significant and reliable sources of revenue for any government. It provides the financial foundation necessary to fund essential public services such as healthcare, education, infrastructure, and national security. For developing countries in particular, including those in sub-Saharan Africa, enhancing domestic revenue mobilization through effective taxation is critical to achieving fiscal sustainability and reducing dependency on external aid (Chiejina, 2023). In this context, tax reforms have emerged as an essential tool aimed at modernizing and strengthening tax systems to ensure sustainable revenue generation. These reforms typically involve measures to broaden the tax base, streamline tax administration, increase compliance, close loopholes, and promote equity and fairness in the tax system (Salawu, 2023). Despite their importance, the implementation of tax reforms often faces numerous challenges, especially in low- and middle-income economies. Many countries have struggled with weak institutional capacities, inefficient tax collection systems, widespread tax evasion, corruption, and an over-reliance on a narrow tax base. Additionally, informal sector dominance and limited taxpayer education further complicate reform efforts. Implementing tax reforms in such environments is therefore not just a technical exercise, but also a deeply political and social process that requires addressing entrenched interests, cultural perceptions of taxation, and governance structures (ResearchGate, 2024) . Over the past few decades, international financial institutions such as the International Monetary Fund (IMF), the World Bank, and regional bodies like the African Union have encouraged countries to adopt comprehensive tax reform strategies. These strategies are intended to make tax systems more efficient, equitable, and growth-friendly. Nevertheless, success has been mixed. In some countries, tax reform initiatives have yielded significant improvements in revenue generation, but in many others, reforms have been poorly implemented, lacking in political will, and met with resistance from both taxpayers and tax administrators. Sustainable revenue generation through effective tax reforms depends on several key factors. First is the administrative capacity of tax authorities to implement reforms and enforce compliance. Second is the legal and institutional framework that supports transparency, accountability, and efficiency in tax governance. Third is the extent to which taxpayers perceive the tax system as fair, (ResearchGate, 2024) which influences their willingness to comply. Moreover, socio-economic conditions, such as poverty, inequality, and the level of informal economic activity, significantly impact the success of tax reforms. In many developing countries, including Cameroon, efforts to reform the tax system have faced considerable hurdles. While some reforms have aimed at simplifying tax procedures and introducing digital systems for tax filing and payments, problems such as limited human and technological capacity, corruption, and taxpayer apathy continue to undermine progress(Chiejina, 2023). The informal sector, which employs a large percentage of the workforce, remains largely outside the tax net, posing a serious challenge to broadening the tax base. Additionally, public distrust in government and poor service delivery further weaken voluntary compliance and reduce the effectiveness of implemented reforms. Given the critical role of taxation in sustainable national development, there is an urgent need to investigate the specific challenges associated with implementing tax reforms. It is against this backdrop that this study seeks to explore the obstacles to the implementation of tax reforms and their implications for sustainable revenue generation, with the aim of providing evidence-based recommendations for improving tax policy and administration. 1.2Statement of the problem Despite the pivotal role tax reforms play in promoting sustainable revenue generation, many developing countries, including Cameroon, continue to grapple with significant challenges in implementing these reforms effectively. Tax reform initiatives are often introduced with the aim of broadening the tax base, improving tax compliance, and enhancing administrative efficiency. However, the reality on the ground shows a persistent gap between policy formulation and practical implementation (IMF, 2023). Several factors, such as weak institutional capacity, poor taxpayer education, widespread informal sector activities, corruption, and inadequate technological infrastructure, continue to impede the success of tax reform programs (World Bank, 2022). In Cameroon, for instance, while the government has introduced several fiscal policies and digital tax administration platforms to improve revenue mobilization, the outcomes have fallen short of expectations. A significant proportion of the taxpaying population remains outside the formal tax net due to the dominance of informal economic activities, which account for nearly 80% of the labor force (AfDB, 2022). Furthermore, corruption and bureaucratic inefficiencies within tax institutions discourage voluntary compliance and erode public trust in the system (Transparency International, 2023). Another pressing issue is the lack of political will and continuity in the enforcement of tax policies. Reforms are often poorly communicated, inconsistently applied, or abruptly altered by successive administrations, leading to uncertainty and noncompliance among taxpayers (OECD, 2023). Additionally, many small and medium-sized enterprises (SMEs), which form the backbone of the economy, perceive the tax system as complex and burdensome, resulting in high rates of tax avoidance and evasion (UNDP, 2022). Given the increasing demand for public services and infrastructure in the face of declining external aid, there is a pressing need to investigate the underlying challenges hindering the successful implementation of tax reforms. 1.3 Objective of the study The broad objective of the study is to investigate the challenges of implementing tax reforms for sustainable revenue generation in Cameroon. The specific objectives is as follows: i.Assess the factors contributing to the ineffectiveness of tax system in generating sustainable revenue Cameroon. ii.Investigate the challenges of implementing tax reforms for sustainable revenue generation in Cameroon. iii.Propose strategies aimed at overcoming the identified challenges and enhancing sustainable tax generation in Cameroon. 1.4 Research questions The following questions have been prepared for the following i.What are the factors contributing to the ineffectiveness of tax system in generating sustainable revenue Cameroon? ii.What are the challenges of implementing tax reforms for sustainable revenue generation in Cameroon? iii.What are the proposed strategies aimed at overcoming the identified challenges and enhancing sustainable tax generation in Cameroon? 1. 5   Significance of the Study The findings of the study will be significant to the following To Government and Policymakers: The findings of this study will provide policymakers and government institutions with evidence-based insights into the specific challenges that hinder the implementation of tax reforms. By understanding these barriers, the government can design more realistic and context-sensitive tax strategies, improve administrative efficiency, and build public trust in the tax system. This study will also support the government's efforts in reducing tax evasion and broadening the tax base. To Tax Authorities and Administrators: The study will benefit tax administrators by highlighting gaps in tax enforcement, compliance monitoring, and taxpayer education. It will also suggest strategic improvements in digital tax systems, staff training, and institutional coordination to enhance the effectiveness of tax reform implementation. To the Business Community and Taxpayers: For business owners and individual taxpayers, the study will offer a clearer understanding of the benefits and expectations of tax reforms. It will also advocate for a fair and transparent tax system that encourages voluntary compliance and reduces the burden of taxation, particularly on small and medium-sized enterprises (SMEs). To Academic Researchers and Students: Academics and students in public finance, economics, political science, and public administration will find the study valuable as a contemporary resource that explores the intersection of tax policy, governance, and sustainable development. It will also serve as a foundation for further empirical research in taxation and public revenue systems. 1.6   Scope of the Study The study focuses on the impact of taxation on the economic development of Cameroon. A case study of Djoum municipal, Cameroon. Empirically, the study will Assess the factors contributing to the ineffectiveness of tax system in generating sustainable revenue Cameroon, Investigate the challenges of implementing tax reforms for sustainable revenue generation in Cameroon and propose strategies aimed at overcoming the identified challenges and enhancing sustainable tax generation in Cameroon. 1.7    Limitations of the Study Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. Insufficient funds tend to impede the efficiency of the researcher in sourcing for the relevant materials, literature, or information and in the process of data collection (internet, questionnaire, and interview), which is why the researcher resorted to a moderate choice of sample size. More so, the researcher will simultaneously engage in this study with other academic work. As a result, the amount of time spent on research will be reduced. 1.8Definitions of Terms Tax Reforms: Tax reforms refer to deliberate changes or adjustments made to a country's tax policies, structures, and administration in order to improve revenue collection, enhance equity and fairness, reduce tax evasion, and support economic development. Tax Compliance: Tax compliance is the extent to which taxpayers meet their legal obligations by accurately reporting income, filing timely returns, and paying the correct amount of taxes due to the government. Sustainable Revenue Generation:This refers to the continuous and dependable process through which governments mobilize domestic resources through taxation and other fiscal instruments to fund development needs without depending excessively on external aid or incurring unsustainable debt (World Bank, 2022).