The Algerian government has proposed a new finance bill that aims to enhance the use of digital payment methods and monitor e-commerce transactions. The bill, which is in line with the country's efforts to promote digitalization, seeks to provide incentives for traders and financial institutions to adopt digital payment systems. The proposed measures include a 10% tax reduction for individuals and businesses that conduct at least 50% of their transactions through digital payment means.
The tax reduction will be applicable to individuals and businesses that are subject to the single presumptive tax or income tax within the category of non-commercial profits. To benefit from this incentive, taxpayers will need to provide proof of digital transactions when submitting their annual tax returns. The new measures are set to encourage a shift towards digital payments, which currently account for a small portion of transactions in Algeria.
The finance bill also proposes to encourage electronic payments for installments related to the "Aadl 3" housing program. Banks and postal institutions will be eligible for a tax reduction on company profits, equivalent to the commissions they earn from electronic payment transactions. This measure aims to promote the use of digital channels for settling dues and support the national strategy for digitalizing financial services.
In addition to promoting digital payments, the finance bill seeks to strengthen tax control over e-commerce transactions. The bill proposes to oblige digital platform operators, both resident and non-resident in Algeria, to identify themselves with the tax authorities and submit an annual electronic declaration. This declaration will need to include data on transactions conducted through their platforms, including the identity of sellers and service providers, payment methods, and transaction values.
Digital platform operators will also be required to inform sellers and service providers that their transactions in Algeria are subject to national tax legislation and that related information will be sent to the Algerian tax authorities. Failure to comply with these obligations will result in penalties, including a fine of one million dinars and possible suspension of the platform's activities.
The new measures aim to reduce the use of cash and improve transparency in transactions, ultimately helping to limit tax evasion and boost public treasury resources. The government hopes that these incentives and stricter regulations will encourage small traders and professionals to integrate into the banking system and promote the use of digital financial services.
The finance bill reflects the government's efforts to create a more favorable business environment and promote economic growth through digitalization. The proposed measures are expected to come into effect on January 1, 2027, and will be implemented in accordance with the country's tax laws and regulations.
Key points
- Algeria's finance bill proposes a 10% tax reduction for individuals and businesses that conduct at least 50% of their transactions through digital payment means.
- The bill seeks to strengthen tax control over e-commerce transactions by obliging digital platform operators to identify themselves with the tax authorities and submit annual electronic declarations.
- The new measures aim to reduce the use of cash and improve transparency in transactions, ultimately helping to limit tax evasion and boost public treasury resources.
