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October 14, 2024 | 11 months ago
Real estate and automotive: no more cash payments!
The Finance Bill 2025 introduces a novelty by abolishing cash payment in certain transactions. This new provision of the PLF 2025 targets in particular the real estate, pleasure boat and vehicle markets, as well as compulsory insurance policies.
The detailed provisions stipulate that real estate transactions involving built and unbuilt property, sales by dealers and distributors of vehicles and machinery, purchases of yachts and pleasure boats, and compulsory insurance policies, must be carried out by means other than cash, through banking and financial channels. The terms and conditions of application of this article will be laid down by regulation.
However, the statement of reasons supporting this proposal does not exhaustive to support it as it is stated. Indeed, it is simply indicated that this proposed measure aims at the institution of the obligation of payment by scriptural means for certain operations, namely real estate transactions in built and unbuilt buildings, sales operations carried out by dealers and distributors of vehicles and machinery, purchases of yachts and pleasure boats and compulsory insurance policies.
It is also specified that this provision is part of the action prohibiting the use of cash payments for the settlement of large transactions, listed above and that of generating the use of means cashless payments, instead of cash, to promote financial and fiscal inclusion.
If this measure is part, one might think, of the gradual abandonment of payment by cash for large transactions, particularly in the real estate or vehicle markets, it also aims to encourage payments by check or other means integrated into the banking system.
This indicates, even if it results from unsaid things which appear implicitly in this provision, from a desire to attack tax loopholes, but also for the sake of transparency in the informal sector in general, and particularly in these niches which escape all control and where pockets of tax evasion but also and above all money laundering operations are nestled.
It is well known by the security services and those of the tax authorities that real estate – throughout the world also – constitutes the preferred sector for money laundering. Come behind luxury products, the most visible of which are vehicles yachts and other pleasure boats.
The latter was demonstrated by the investigations into oligarchs and other state officials, including ministers, who revealed numerous real estate acquisitions in Algeria.
This draft provision has the advantage of addressing several issues, including the fight against informality and the banking of the money supply that feeds it, tax evasion and its hidden niches, and money laundering.
October 14, 2024 | 
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