Algeria: MPs Refuse To Assign Sonatrach Petroleum Tax Collection!

In a “heated” parliamentary session, deputies of the National People’s Assembly criticized on Tuesday the performance of the Finance and Budget Commission in the lower chamber of parliament, describing it as a “friendship commission with the government”, because of its rejection of all amendments to the financial laws with the granting of full tax powers to Sonatrach as advocated by the Ministry of Finance.
For the first time, the ministers of finance and energy present at the National People’s Assembly allied to answer MPs’ burning questions regarding repeated amendments to the finance laws which stipulate that “the laws of finance provide only for the provisions relating to the ratios and how to collect deductions of any nature as well as in the area of tax exemption”.
The Minister of Finance Mr Loukal argued that the project brought by the government came to review the possibility of legislation in the field of taxation, and is not limited to the Finance Act, especially after the amended hydrocarbons law comprising new tax measures.

Loukal defended before the MPs the tax measures contained in the hydrocarbons bill, pointing out that Algeria has lost many investments in the field of research and exploration, saying: “The oil market is now witnessing fierce competition and this juncture requires more incentives and more flexibility in the implementation of contracts.

According to the minister, this amendment will strengthen the role of the National Hydrocarbon Company Sonatrach as an economic agent in the development of the country.

This was rejected by the majority of deputies who were surprised to grant powers to Sonatrach in the area of petroleum tax collection, with an MP from the National Democratic Assembly, Hakim Berri castigating the amendments, especially since Article 18 itself was amended last year, which made Algeria classified as an unstable state, according to him.

For his part, MP Dakhili Salah, criticized the work of the APN’S Finance Commission after rejecting all the amendments submitted, whether related to the organic law and the Finance Act for 2020, by describing it as “a friendship commission with the government and not a bona fidé financial commission”.
Energy Minister Mohamed Arqab defended the project, saying the amendment to Article 18 of the Organic Law on Finance Laws would give a strong signal to foreign partners about the stability of laws in Algeria, adding that proposed tax provisions in the hydrocarbons law would give a picture of market stability.

He referred to this effect to the taxation system in Algeria, which ranked 190th in the classification of a magazine specialized in this field of endeavor because of its stringent fiscal measures, pointing out that Sonatrach is losing in 150 hydrocarbons fields because of its weak potentials and the high taxes imposed on them.