Algeria- 2025 Finance Bill: Strengthening the National Economy and Improving Citizens’ Living Conditions

BY: Dr. Hana Saada

Algiers, Algeria | November 13th, 2024 — The Finance Bill for the year 2025, approved by the People’s National Assembly on Wednesday, introduces new measures aimed at boosting investment and strengthening the national economy, while also enhancing citizens’ purchasing power and improving their living conditions.

Investment Promotion and Economic Growth

Among the key provisions of the bill is the authorization for the public treasury to issue “sovereign sukuk” bonds, allowing both individuals and entities to participate in financing public facilities and/or state-owned commercial infrastructure. These bonds would be exempt from income tax (IRG) or corporate profits tax (IBS) for a period of five years on the income derived from these instruments, whether issued by the treasury or traded on an organized market. Additionally, the bill proposes to exempt these sovereign sukuk from registration and real estate publicity fees for five years.

The law also extends a 50% reduction in income tax or corporate profits tax for five years on earnings generated in southern regions of the country. Furthermore, it provides exemptions from registration fees for contracts related to the establishment of companies marked as “Innovative Projects” and for property acquisitions by companies awarded the “Startup” or “Business Incubator” labels, especially those aimed at creating industrial activities. The tax exemptions granted to companies holding the “Incubator” label will also be extended for an additional two years, provided the label is renewed.

To stimulate investment further, the bill proposes an increase in the social capital of the National Investment Fund (FNI) from 150 billion DZD to 275 billion DZD. It also extends the guarantees provided by the Credit Guarantee Fund for Small and Medium Enterprises (FGAR) to cover all loans (currently, only investment loans are covered).

Social Measures for Housing and Loans

In terms of social measures, the finance bill outlines that the treasury will bear the interest during the deferral period and reduce the interest rates on loans granted by public banks by 100% for the construction of 135,000 rental-sale housing units in 2025. Additionally, the bill includes a 10% discount for beneficiaries of the “Aadl 03” rental-sale housing program who have paid 38% of the housing price and wish to pay off the remaining amount in full before the due date.

Enhancing Consumer Services and Purchasing Power

The bill also extends the permission for banks to grant consumer loans to families for the purchase of goods, now allowing loans for the acquisition of services (such as health and travel).

To support citizens’ purchasing power, several fiscal measures are introduced, including the legal framework for the exemption of VAT on frozen white meat imports from January 8, 2024, to December 31, 2025. The bill also extends the temporary exemption from VAT until December 31, 2025, for transactions involving dry legumes, rice (both imported and locally produced), fresh fruits and vegetables, eggs, broiler chickens, and locally produced turkeys.

Furthermore, the bill proposes extending the application of a reduced 5% customs duty on the importation of live cattle, fresh chilled beef, and vacuum-packed chilled lamb until December 31, 2025. This reduced rate would also apply to sheep imports.

Tax Expansion and Economic Incentives

Lastly, the 2025 Finance Bill focuses on expanding the tax base and introducing a series of incentives and tax facilitation measures targeting various sectors of the economy, all without imposing new taxes. These provisions aim to further stimulate economic activity and create a more favorable environment for both domestic and foreign investment.

In summary, the finance bill for 2025 includes a comprehensive set of measures designed to enhance Algeria’s economic prospects while addressing the immediate needs of its citizens.

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