The Algerian government has introduced a new incentive to encourage electronic payments, as part of the 2027 Finance Bill. The proposal includes a 10% tax reduction for businesses and professionals who receive at least 50% of their revenue through electronic payments. This measure aims to accelerate the shift away from cash transactions and promote the use of digital payment methods. The bill targets two categories of taxpayers: those subject to the unified flat tax and those subject to income tax on non-commercial profits.
To benefit from the tax reduction, eligible taxpayers must provide evidence that at least 50% of their revenue comes from electronic payments. They must also submit documents confirming electronic payments received during their annual tax declaration. The tax incentive will apply to transactions made until December 31, 2028. This initiative is part of a broader effort to modernize financial transactions in Algeria and promote a more digital economy.
The Algerian government cites the persistence of cash transactions as a major issue in commercial transactions. The widespread use of cash complicates the tracking of transactions and the accurate reporting of revenue by professionals. This situation limits the traceability of transactions and fosters underreporting of income, ultimately affecting tax revenue. By offering a tax reduction, the government aims to make electronic payments more attractive and encourage professionals to integrate digital payment methods into their daily activities.
The use of electronic payment terminals remains limited in Algeria, particularly in small businesses and retail. According to data from the GIE Monétique, the overall rate of electronic payment terminal deployment is around 5%. This low adoption rate highlights the challenges faced in changing payment habits. The government recognizes that simply requiring the use of terminals is not enough to convince economic operators to change their practices.
The 2027 Finance Bill aims to support the bancarization of small businesses and liberal professions, as well as the digitalization of financial services. By providing a direct financial incentive, the government hopes to encourage professionals to adopt electronic payments and benefit from the tax reduction. The measure is part of a broader effort to extend the network of electronic payment terminals and develop alternative solutions, such as mobile payments.
The effectiveness of the tax incentive will depend on its adoption by professionals and their ability to meet the required threshold of 50% electronic payments. The government will need to monitor the impact of this measure and adjust its policies as needed to achieve its goals. The 2027 Finance Bill represents a significant step towards modernizing financial transactions in Algeria and promoting a more digital economy.
The proposed tax reduction is one of several measures aimed at reducing the use of cash in Algeria. The government aims to promote a culture of electronic payments and increase access to banking services. The 2027 Finance Bill also includes other initiatives, such as a redevance CCR of 20,000 DA and a 60% tax on certain transactions. These measures are expected to contribute to a more efficient and transparent financial system in Algeria.
Key points
- The 2027 Finance Bill proposes a 10% tax reduction for businesses and professionals who receive at least 50% of their revenue through electronic payments.
