Algeria Pivots Tax Policy Towards Investment Support While Expanding Compliance Measures
By Dr. Hana Saada
Algeria’s tax administration is repositioning fiscal policy to prioritise investment support alongside revenue mobilisation and institutional modernisation, Director General of Taxes Djamel Hanniche said on Monday.
Speaking to Algerian Radio, Mr Hanniche said taxation should no longer be viewed solely as a tool for collection, but as an instrument to guide economic activity and support growth. He pointed to a framework designed to encourage productive investment, reduce project costs and improve profitability, particularly for enterprises that generate value.
The current system combines incentives under general law with targeted regimes linked to investment promotion. These measures, he said, are intended to sustain business continuity, stimulate new projects—especially in the South and High Plateaus—and strengthen productive capacity. He also highlighted the importance of large-scale, structuring investments, including infrastructure, transport equipment, ports and energy projects, as drivers of Algeria’s regional and international economic positioning.
A second pillar of policy centres on voluntary compliance. Under provisions in the 2026 finance law, taxpayers may regularise previously undeclared income or assets without prior penalties or prosecution, subject to payment of a flat 8 per cent levy. The measure applies to individuals outside the tax register, those holding commercial licences without fulfilling reporting obligations, and registered taxpayers who have not declared all revenues or holdings.
In parallel, legacy tax debts dating back to 2011 and earlier have been automatically cancelled. More recent liabilities are subject to a regularisation mechanism that removes recovery penalties and reduces principal amounts by 30 per cent, with payment options available either in full or by instalment.
Mr Hanniche linked these steps to a broader objective of strengthening ordinary tax revenues to cover a greater share of public spending beyond hydrocarbons. While taxation finances core public services and infrastructure, he stressed that improved yield must be pursued within a framework of fiscal fairness. Given Algeria’s declaration-based system, the priority is to enhance oversight, control and the use of available data.
He identified the informal economy and underreporting as key sources of revenue erosion, noting that addressing them requires a wider institutional effort. The tax authority, however, is intensifying its own controls through data-driven methods, cross-checking of information and risk-based approaches.
Digital transformation remains central to the reform agenda. The administration is expanding e-filing, developing the “Jibayatic” system, and generalising the use of a unified tax identification number, alongside new digital services aimed at simplifying procedures. According to Mr Hanniche, these tools are intended to reduce direct contact between officials and taxpayers, limit irregular practices, save time and improve transparency—placing the taxpayer at the centre of a modernised fiscal system.
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