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The government re-establishes a procedure that was abandoned in 2014:

Complementary Finance Act / CFA, which was canceled since the beginning of the financial crisis, reappears with the nomination of Ahmed Ouyahia as Prime Minister. As usual, this kind of mechanism aims to reinforce the tax burden by creating additional and unpopular taxes. 

Second change for CFA ?

By Boualem Rabah

The CFC 2018 project is no exception to this rule. This was confirmed by the few information that the press received a few days ago. The text, which may be discussed by the Council of Ministers this Wednesday, provides for a series of measures that lead to the introduction of new taxes and the upward revision of others. The document also intends to review the conditions of access to the agricultural land concession and to revise upward the budget of some ministerial departments. But the consequent increase in taxes for driver's license and registration will have the most attention. The niche markets are the executive's objective to reduce the deficit still affecting treasury, despite the use of monetary financing. As in 2009, when the new car tax was introduced, this time the government is targeting a similar area that could have a significant contribution to revenue.


Driver's license and registration  become more expensive

Thus, the text proposes, in article 2, the modification of the 144 and 145 sections of Stamp Code, by increasing in particular the fees for the driving license’s exam and the stamp duties for the issue of the driving license and the registration card. The amount is quite important. Indeed, section 144 states that " the fees to obtain a driving licence categorie are set at two hundred (200) DA ". 

So there is no change because the same amount is currently required for exams. The increase concerns the value of the obligatory stamp for the issue of the driving license.The draft text states that " the issue of the driving license, its renewal, its duplicate, the conversion of military driving license into a civilian driving license or the exchange of a foreign driving license for an Algerian one, is preceded by the purchase of a stamp duty of five thousand (5,000) DA. 

The same section stipulates that, the text also requires a fee of 300 DA for the issuance of the mopeds driving license. However, section 154 introduces a significant increase in the tax of the vehicle registration cards (gray card).10 000 DA is the amount of the tax for passenger cars, vans, trucks and public transport vehicles, with an engine power of 2 to 4 horses and also for tractors, 16 000 DA for vehicles with 5 to 9 horses, 20 000 DA for vehicles exceeding 10 horses and 30 000 DA for public works utility vehicles. 

Complementary finance act project justifies the increase in the amount,from 500 DA to 5 000 DA for the driving license stamp duty, by establishing the biometric license. The same reason was explained when the biometric passport stamp duty amount was increased. 

The document specifies that the proceeds of these taxes and duties will now partially finance the Solidarity and Guarantee Fund of the Communities and the National Delegation for Road Safety, which will receive respectively 15% and 10% of the revenues of the taxes and rights of the driving licence and registration card, the rest will be allocate to the state budget. This is the same argument that was presented when the road tax and the new car tax were established. But even years later, the government has not yet provided a report, despite the poor quality of the road network.


A temporary additional customs tax 

The other measure announced in the CFC 2018 preliminary draft is the creation of a temporary additional customs tax on imports of finished products. After after the ban on import, which has provoked a strong reaction from foreign partners, notably the European Union (EU), the government has recoursed to another explanation to "strengthen measures in order to protect national production and reduce the cost of imports". 

Indeed, this tax, which will be establish in June or July, will be a new mechanism to reduce the commercial deficit by reducing imports of finished goods already produced locally. While the 2018 Budget Act has forecast a significant decrease in the operating budget, the CFA 2018 project announces budget extensions for several departments. A sum of 500 billion dinars will be granted. According to article 8 of the CFA project, which amends section 125 of the 2018 Budget Act, the program authorization ceiling for various sectors will be increased.The amended article 125 states: “A two thousand seven hundred seventy billion five hundred and six million nine hundred and sixty-three thousand dinars (2,770,506,963,000 DA) amount is intended as a program authorization ceiling for 2018, divided by sector in accordance with append "C" annexed to present law.”  

The 2018 Finance Law program authorization ceiling was of two thousand two hundred seventy billion five hundred and six million nine hundred and thirty-six thousand dinars (2,270,506,936,000 DA). This generous sum will be distributed over several departments, including the Ministry of National Defense which continues to hold the largest budget of the Algerian state. This departament will have its budget increase by 312 million dinars to reach 1118 billion dinars. 

The most important extensions are granted to the Ministry of Youth and Sports which has an additional budget of 3.65 billion, Health with an extension of 3.16 billion, Foreign Affairs with more than one and a half billion in addition, while the National Education receives an additional 91 million. Why this increase? The needs of these departments were not well assessed during the drafting of the 2018 budget law? Will this capital come from unconventional funding? Responses will be given by the executive after the approval of the text.


Agricultural sector accessible to foreign investors

The other new measure provided by this project concerns the agricultural sector. In search of investment, the sector will be open to foreign private capital. Thus according to the text, the national and foreign private could obtain concessions to exploit agricultural areas that belong to the state. This procedure is justified by the failure of all attempts to renovate activity in the pilot farms of the public sector. 169 farms, totaling 160 000 hectares, are directly concerned by this project. The state will be ensured by a specification to the concession contract which specifies that the concessioned farmland will not be redirected from their original purpose.We remind you that a foreign investment in agriculture has already begun. The Americans had obtained an agricultural concession in the Naama and El Bayadh area, where they have already started a project.


Pages traduites par Mme Gabriela Kouahala

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