Government’s attempt to retrieve 3,700 billion centimes (DA) from black market dubbed as “intricate operation”

Finance Minister Abderrahmane Benkhalfa officially launched Tuesday, the tax amnesty process. The purpose of such a move is to allow the informal sphere players to deposit their overall funds estimated at 3,700 billion centimes (DA) in banks, without penalty or prosecution, in exchange for a small flat fee of 7%.

According to the Government, the low rate and assurance with the proposed option of  ‘clean hands’ should encourage all fraudsters to back down  and eventually toe the legal line.

Except that there’s a small problem. In addition to the tax amnesty, the Government has not planned a hardening of sanctions and remedies for those still operating in the informal market who have not regularized their situation by the end of December 2016, the fixed deadline  of the operation.

Will the Government bring down the hammer on them? That is the question!

However, a host of economic experts criticized the Government’s decision to limit the tax fee applicable to these funds deposited at the banks and financial institutions set at 7 percent in order to transfer the money from the informal market to official channels namely banks.

These economists argued that this Decree will further alienate employers, encouraging them not to declare their wealth.

Economic expert, Doctor Farès Mesdour, told “Echorouk” that the action, which he described as “an emergency”, to recover (DA) 3,700 billion centimes now spinning on the black market, would only complicate matters further stressing that the government should have opted for an exemption of taxes instead of a tax amnesty over a period of 5 to 10 years to ensure the success of the operation.

He further affirmed that the taxation for foreign investors should be reviewed, to ensure that Algeria could open its economy to the world and achieve a thriving export and import trade, instead of keeping Algeria as a virtual “tax haven”.

For his part, the President of the National Association of Algerian economists, Saadane Chebaiki, said in a statement to “Echorouk” that the step taken by the Government with regard to the retrieval of funds from the informal market meant for the banks, is a positive and proper procedure to shore up the formal trading business adding that it would regulate the national economy in the long term.

However, he said that the problem must be addressed at the roots’ level in order to make this salvaging project a tangible success.

He also called for a drastic legal action to compel banks to facilitate the deposit of funds, with tax incentives if need be.