Local taxes to complete projects in Algeria

The Algerian interior ministry plans to withdraw many properties and real-estates from public institutions to grant them to municipalities. A law on municipal taxes is expected to be promulgated to conduct reforms parallel to reforms on taxes department. This aims at collecting 7,000 billion DZ of uncollected taxes.

The ministry set a road map to improve municipalities’ income and raise their taxes. This is meant to reach financial independence, cover their expenses and fund their projects separately from the Public Treasury. This mechanism was initially approved by the ministry. It is based on enhancing municipalities financial resources as from 2017 by reinforcing real-estate properties and tax measures.

A regulatory text will be released before the end of the year about the transfer of some properties ownership to municipalities. Of them, there are 100,000 shops.

According to Echorouk’s sources, those 100,000 shops will be integrated into municipalities park. This will enable to municipalities to raise their financial resources to 30,000 billion DZ in 2017 from 1,700 billion DZ in 2016.

The government relies on real-estate resources to increase incomes and cover the half of deficit in terms of taxes on professional activity. They were reduced to 1 percent from 2 percent as part of the Complementary Financial Act 2015. This caused a loss of 5,000 billion centimes.

The government also plans to raise VAT to 9 percent from 7 percent.