IMF advises Algeria to impose new taxes

The International Monetary Fund (IMF) called on Algeria to ban subsidy progressively, impose new immediate taxes on citizens and postponing money borrowing to 2019.

The IMF advised the government to reduce expenses and increase taxes on income in order to improve general finance and avoid borrowing money.

It also called on North African governments to conduct urgent financial reforms in the next budgets, use modern fiscal systems and reform retirement systems.

It expected a weak growth rate in Tunisia, Algeria and Libya while it said Morocco and Egypt’s economic performance would be improved.

North Africa remains the less attractive region in terms of investment and tourism. Investment flows went down to $11.5 billion in 2015 from $17 billion in 2012. In Egypt, they reached $4.8 billion and about $4 billion in Morocco.

Algeria relies on gas incomes by 97 percent and needs to expend tens of billions of dollars per year to subsidize oil prices. That increased budget and the commercial balance deficit to more than 22 percent and 15 percent respectively.

The government also needs $42 billion to complete expenses scheduled in the budget. Otherwise, it would have to ban tens of big projects this year, according to the same source.