Algeria's Finance Minister, Mohamed Lamine Labo, presented the 2027 finance bill to the National People's Assembly, highlighting its focus on supporting the national economy, stimulating diversification, and maintaining citizens' purchasing power. The bill includes various legislative measures aimed at promoting economic growth, improving living standards, and ensuring a stable economic environment. Labo emphasized that the bill was prepared in a challenging international context marked by geopolitical uncertainty, inflationary pressures, and fluctuations in energy markets.
The proposed measures in the finance bill include encouraging productive investment, promoting economic diversification, and preserving purchasing power. Additionally, the bill aims to expand the tax base, mobilize resources, simplify procedures, and accelerate the modernization of administration. It also seeks to enhance tax compliance, transparency, and combat tax evasion and fraud. Other measures include customs-related initiatives and those related to state properties. These steps are designed to foster a more favorable business environment and improve the overall economic climate.
To stimulate investment, the bill proposes the reorganization of the institutional framework governing investment. This involves the creation of three new bodies: the National Agency for Investment Promotion, the National Investment Council, and a one-stop shop for investment. By streamlining investment processes, the government aims to attract more domestic and foreign investment, thereby boosting economic growth. The bill also includes provisions for simplifying administrative procedures, which will help reduce bureaucracy and encourage entrepreneurship.
In terms of tax reforms, the bill suggests making electronic declaration and payment mandatory for taxpayers subject to the unique lump-sum tax. This move is expected to enhance tax compliance and reduce the administrative burden on taxpayers. Furthermore, the bill proposes extending the exemption from value-added tax (VAT) on certain essential goods, such as dry legumes, fresh fruits and vegetables, and locally produced poultry, until December 31, 2029. This measure aims to protect citizens' purchasing power and alleviate the cost of living.
The finance bill also outlines key economic indicators for 2027, including a projected growth rate of 4.2% and budget revenues exceeding 9,251.1 billion Algerian dinars (DZD). Budget expenditures are expected to reach 17,251.6 billion DZD in terms of commitment and 17,882.6 billion DZD in terms of payment appropriations. A significant portion of these expenditures will be allocated to subsidies for widely consumed products. The bill also provides for 4,356.64 billion DZD in commitment and 4,415.35 billion DZD in payment appropriations for transfer expenditures.
According to Labo, the projected economic growth rate for 2026 is expected to reach 4.3%, driven primarily by the good performance of economic activity outside the hydrocarbons sector, which is anticipated to grow by 4.8%. The hydrocarbons sector is also expected to see a recovery, with growth projected at 1%. In nominal terms, the gross domestic product (GDP) is expected to exceed 48,723 billion DZD in 2026. The minister also highlighted that the 2026 fiscal year is expected to close with improved budget balances, resulting from the anticipated growth in budget revenues and stable expenditure levels.
The National People's Assembly has begun debating the 2027 finance bill, with discussions set to continue over three days. The bill is expected to be voted on during a plenary session on November 16. The government aims to implement these measures to support economic growth, protect citizens' living standards, and ensure a stable economic environment. The bill's passage will be crucial in shaping Algeria's economic trajectory for the coming year.
Key points
- The 2027 finance bill includes measures to support economic growth, stimulate diversification, and protect citizens' purchasing power.
- The bill proposes the creation of new bodies to promote investment and simplify administrative procedures.
- The projected economic growth rate for 2027 is 4.2%, with budget revenues expected to exceed 9,251.1 billion DZD.
