Algeria sets undeclared raise under VAT cover

The Financial Act 2016 still raises controversy a week after it entered in force and the finance minister Abderrahmane Benkhalfa closed the debate about it.

Economic operators in 6 industrial and service sectors were surprised by the raise of value-added tax (VAT) by 10 percent. That means it reached 17 percent. The concerned services includes home appliances, office tools, mobile phones, Internet services, water and energy, Echorouk has learnt.

Economist Bachir Msitpha believes that the raise was necessary to feed the Public Treasury in the next few months.

He said a toll presented by the Algeria Bank’s governor showed that $6 billion were consumed from the monetary reserves. “That pushes to sound the alarm.”

Yet, Msitpha called on the government to avoid such choices in the next financial acts. Otherwise, Algerians’ purchasing power will be in danger.

“Solutions can include imposing fines on tax evasion rather than criminalizing it, imposing taxes on farmers who do not exploit their lands and taxes on black market,” said the expert.