Algeria

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Return to homepage  |  Last updated: 14 August, 2020

Algeria has introduced a number of tax-related measures, and reduced the reserve ratio for banks.

The government of Algeria has delayed the filing date for certain tax returns and the due date for remitting payments of tax.

Social measures

Payment of social security contributions at the level of all agencies:

• The Ministry of Labor, Employment and Social Security has authorized the employing bodies, by means of a communiqué, to proceed with the payment of social security contributions at the level of all agencies throughout the national territory, without having to go to the agencies to which they report.
• Thus, from 22 March 2020 and until further notice, employers will be able to deposit their cheques or notices of payment of social security contributions at the level of each structure under the responsibility of the Caisse Nationale des Assurances Sociales des Travailleurs Salariés (CNAS), whether it is a payment center or a collection service.

Use of tele-declaration services:

• The same Ministry has announced the possibility for non-employed workers and employing organizations to make use of tele-filing and tele-payment services for the payment of contributions

Following a press release from the Minister of Labour, Employment and Social Security, dated 15 April 2020 it was decided:

• Extension of the payment deadlines for the employer's share of social security contributions to the Caisse Nationale des Assurances Sociales (CNAS) for the month of April to 30 May 2020, instead of the legal deadline of 30 April 2020;
• Postponement of declarations and payments of social contributions to the National Social Security Fund for Non-Employed Persons (CASNOS) relating to the financial year 2020 until 30 September 2020, instead of the legal deadline of 30 June 2020;
• Suspension for a period of six (06) months of penalties and late payment increases, starting in April 2020, for the CNAS/CASNOS schemes;
• Possibility of rescheduling previous debts in respect of CNAS and CASNOS contributions, through payment schedules determined according to the case and situation of each company;
• Anticipation of annual holiday payments by the Caisse Nationale des Congés Payés et du Chômage intempéries des secteurs du BTPH (CACOBATPH), in proportion to the number of months contributed during the period from July 2019 to February 2020.

Measures relating to the organization of human resources

• For workers in the public sector [Institutions and public administrations]:
• An executive decree on measures to prevent and control the spread of the COVID-19 published in the Official Gazette No. 15, on Sunday, 22 March 2020, brought a series of so-called exceptional measures, applicable to the entire national territory for a period of fourteen (14) days.
• Under the terms of the said decree, at least 50% of the staff of each institution and public administration shall be placed on exceptional paid leave for the aforementioned period.
• In addition, the following personnel are excluded from the above measure:
  • Healthcare workers regardless of employer;
  • The personnel under the General Directorate of National Security;
  • The personnel under the General Directorate of Civil Protection;
  • The staff under the General Directorate of Customs;
  • The staff under the General Directorate of Penitentiary Administration;
  • The staff of the Directorate General of National Communications;
  • Quality control and fraud control personnel;
  • The personnel coming under the veterinary authority;
  • The personnel coming under the phytosanitary authority;
  • Staff assigned to hygiene and cleaning missions;
  • Staff assigned to surveillance and security missions;
• By decision of the competent authority, staff essential for the continuity of vital public services may also be excluded from the measure provided for above.
• The decree specified that pregnant women, women raising children, as well as people with chronic diseases and those with medical vulnerabilities, are considered to have priority for exceptional leave.

For workers in the private sector:

• In a press release dated 23 March 2020, the President of the Republic declared that the measure relating to the release of 50% of the workforce, applicable to workers in institutions and administrations in the economic and public service sectors is also applicable to the private economic and service sectors.

Measures taken by the Bank of Algeria:

• The minimum threshold of the liquidity ratio, set by the provisions of Article 03 of By-law N° 2011-04 of 24May 2011 on identification, measurement, management and control the liquidity risk of banks and institutions financial, is reduced from 100% to 60%.
• Banks and financial institutions are exempted from the obligation to build up a cushion of security, as laid down in Article No. 04 of the Regulation n°2014-01 of 16 February 2014 on the coefficients of the solvency rules applicable to banks and institutions financial at 2.5%.
• The Monetary Policy Operations Committee decided to reduce the required reserve ratio from 10% to 8% and to lower the reserve ratio by 25 basis points (0.25%). The key rate of the Bank of Algeria set at 3.25% as from 15 March 2020.
• The Bank of Algeria has allowed the authorized intermediary banks, through a note, to receive documents relating to import operations by electronic means supported by a confirmation swift from the bank sending the documents.
• These documents received electronically can be used to complete all banking and customs formalities applicable to import operations.
• It remains understood that the authorized intermediary bank must indicate on each of the documents received the direct debit number relating to the import operation in question.
  

In the current context of the spread of the COVID-19 pandemic and in application of the instruction 05/2020 of April 6, 2020 issued by the Bank of Algeria, banks and financial institutions will examine the individual situation of each customer (individuals, professionals, VSE, SMEs/SMIs, large companies, etc.) and take appropriate measures:

• Postponement and/or renewal of maturities of credits arriving on or after 31 March 2020
• The consolidation of unprocessed receivables as of March 31, 2020 and thereafter
• Extension of deadlines for the use of appropriations and deferrals of payments
• Cancellation of late payment penalties for receivables due on or after March 31, 2020
• Maintaining and/or renewing operating lines of credit
• The measures decided upon shall apply for a period of six months from 31 March 2020
  

The measures decided upon shall apply for a period of six months from 31 March 2020.

Suspension of contractual deadlines and application of penalties for late payment:

• In order not to penalize companies that are unable to carry out the works and services provided for in the contracts, the Instruction would provide for the application of the provisions of Article 147 of Presidential Decree No. 15-247 of September 16, 2015, regulating public procurement and public service delegations ("Public Procurement Code"), drafted as follows: "Exemption from late payment penalties is the responsibility of the contracting department. It shall apply when the delay is not attributable to the contracting party to whom orders to stop or resume services are issued in this case. In the event of force majeure, deadlines are suspended and delays do not give rise to the application of late penalties within the limits set by the orders to stop and resume services taken as a result by the contracting service. In both cases, exemption from penalties for delay shall give rise to the issue of an administrative certificate.
• More specifically, the instruction would provide for "the suspension of contractual deadlines and the non-application of financial penalties for delays within the limit set by the orders to stop and resume services issued by the contracting service as a result", in particular under the following conditions:
  • The suspension of the application of penalties for delay is applicable from the date of publication of Executive Decree No. 20-69 of 21 March 2020, relating to measures to prevent and combat the spread of the Coronavirus;
  • The suspension of deadlines and the application of penalties for delay, as provided for in Article 147 of the Public Procurement Code, must be applied by the contracting authorities, at the request of contracting companies.
    

Securing the payment of receivables held by these companies for public procurement

• In order to cushion the financial consequences of this crisis on public and private construction companies and on employment, the Instruction would provide that the Minister of Finance is responsible for releasing and notifying, under the seal of urgency, to the various contracting authorities, the payment credits and revaluations necessary for the payment of claims held by these companies under public contracts. 
• Lastly, the Instruction would state more broadly that the Government will continue to examine all ways and means of responding to the difficulties encountered by Algerian enterprises as a result of the health crisis, which attaches "the utmost importance to the rigorous and diligent application of the present instruction.

A periodic meeting of the Council of Ministers was held on 26 July 2020 to discuss and implement, notably, measures to alleviate the pressure and impact of the Covid-19 pandemic on businesses, SMEs, the liberal professions. The introduction of recovery and development programmes for certain economic sectors.

With regard to the economic and social impacts caused by the health crisis and measures to address them:

• Freezing of the payment of financial charges and fiscal and parafiscal obligations owed by economic operators for the period corresponding to the containment period. Thus, no sanctions or payment of penalties will be required from these operators during this period.
• The Ministers concerned are therefore responsible for informing the banks, the tax administration and the administration under the Ministry of Labour of this decision.-
• Rigorous evaluation of the damage suffered and loss of earnings recorded by economic operators, particularly in the case of small and medium-sized enterprises and small trades. –
• Allocation of financial aid for small trades (taxis, hairdressers, etc.) to the value of 30,000 Dinars, for a period of 3 months, on the basis of a rigorous evaluation of the situation of each corporation during the last 4 months. This measure should be ratified by an executive decree to be issued before the end of the month.-
• The Minister of Finance has been instructed to take a note to the banking sector to ensure the implementation of the preventive measures to facilitate financing already taken at the level of the Central Bank

With regard to the industrial sector, the decrees laying down specifications for the assembly of household appliances, the assembly of vehicles, the import of new vehicles and the acquisition of renovated lines and equipment have been adopted.

Main sources of information:

• Government of Algeria
• Bank of Algeria (PDF 155 KB)
• Professional Association of Banks and Financial Institutions
• Large Companies Department (DGE)
• General Taxation Department
• CNAS
• Caisse nationale de sécurité sociale des non-salariés (CASNOS)
• Caisse nationale des congés payés et du chômage intempéries des secteurs du BTPH (CACOBATPH)

Tax: Ramzi Ouali – rouali@kpmg.dz
Legal: Lyes Merabet – lmerabet@kpmg.dz