Bachir Messeitfa: “Government Should Impose Tax On Used Cars Less Than 3 Years Old”

Trade Ministry’s decision to return soon to importing cars with less than three years old is a response, intentionally or unintentionally to the demands that were urgently recommended by the World Trade Organization, and this throughout the course of negotiations to join the WTO, which is still ongoing.

World Trade Organization reiterated its demands to Algeria about the need to free the trade and especially return to the import of used cars, as it was addressed to the file in more than one tour during the negotiations to join the WTO, which are still ongoing, and the file was subject of talks in years 2013 and 2014, respectively, when it was said that the move reflects the willingness of members of the organisation to push Algeria to cancel its decision to ban the import of this kind of industrial vehicles.

In the subject, the former Prospective and Statistics Minsters, who is also an economist, Bachir Meseitfa, said that Algeria, contrary to what is said, did not bow to the request of the World Trade Organization because the protocols of negotiation with the WTO do not include this file only, for example, there are demands for the reduction of energy subsidies from electricity and gas which were were offset by Algeria this year by an increase of $ 200 million.

“This decision has a link with need of the government and the country’s budget to the imposition of new taxes, because the size of the market is large, and therefore the collection of new taxes is important, and if government imposed 2% only, it will achieve considerable revenues. Government is in dire need to impose a new tax”.

“This procedure can be considered as being part of the expansion of the taxation revenues, because the increase in the various tax rates is usefulness, but the expansion of the revenues can bring solutions”.

“Imposition of a tax on the professional activity of the used cars less than three years old is expected to enter into force, or what is known as the “TAB” (Tax Amortization Benefit), which is likely to be in the range of 2%”.

“I do not think we should keep the same mechanisms that were working previously on this important market. It is likely to be organized in the framework of car dealerships who were affected by the market regulation procedures and stopped activity because the state is already suffering from the decline of hard currency, and there is a desire to control this problem through imposing it to taxation, because the activity of individuals is not taxed”.

“This procedure’s repercussions could come down by 35%, because the supply will increase and the demand will decrease, and therefore this situation will push prices downward”.