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October 9, 2025 | 4 hours ago
Budget, Growth, Taxation... What the 2026 Finance Act Has in Store
The government is setting out its ambitions and reaffirming its commitment to continuing efforts to diversify the national economy by stimulating growth through the promotion of investment and the preservation of household purchasing power. These are the two main thrusts of the draft finance bill (PLF 2026), which will soon be debated in both houses of Parliament for adoption.
The 2026 finance bill provides for a budget of 17.636 trillion dinars, a 5% increase, to support growth, social justice, and the energy transition. It includes increases in salaries, scholarships, and unemployment benefits, along with subsidies for basic commodities and investments in housing, infrastructure, and public facilities.
The wage bill amounts to 5,926 billion dinars, representing 33.6% of the total budget. Social transfers amount to 2,812 billion dinars for public institutions and 2,284 billion dinars for citizens, of which 420 billion is dedicated to unemployment benefits. Subsidies for necessities (cereals, milk, energy, sugar, etc.) represent 657 billion dinars. Investment expenditure is estimated at 4,073.8 billion dinars.
In the housing sector, the program plans to build 310,000 units, including 300,000 under the rent-to-own scheme (AADL) and 10,000 rental units (LPL). In terms of public facilities, 430 structures will be built, including schools and healthcare centres.
On the tax front, the bill introduces a special voluntary regularization scheme until December 31, 2026, with a 10% flat tax rate and no penalties. Exemptions on essential goods are extended, VAT is reduced to 1% for renovations of old housing, and tax breaks for start-ups are maintained. Measures are also planned to facilitate Islamic financing and strengthen the fight against fraud, money laundering, and terrorist financing.
The bill forecasts economic growth of 4.1% in 2026, driven by non-hydrocarbon sectors, with growth expected to reach 4.5% in 2028. Non-hydrocarbon GDP is expected to reach 36,286.5 billion dinars. Agriculture, particularly cereal production, is expected to increase from 44 to 62 million quintals between 2026 and 2028. The industry is expected to grow at an average annual rate of 6.2%, and construction at 5.1%, due to the use of local materials efficiently.
Despite these efforts, public finances are expected to show successive deficits: 5,186.6 billion dinars in 2026 (12.4% of GDP), 5,133.8 billion in 2027 (11.4%) and 5,417.1 billion in 2028 (11.2%).
In public works, a budget of 392 billion dinars is planned to complete structural projects, including the Béchar-Tindouf-Gara Djebilet line, the extension of the Algiers metro, tramways in several cities, and the creation of cable cars. The bill also provides for the exemption of electric and hybrid vehicles from vehicle tax, with the installation of 1,000 fast charging stations by 2028. On the other hand, LPG vehicles will once again be subject to annual vehicle tax.
Finally, the 2026 draft finance bill provides for the importation of 10,000 new buses to modernize public transport. It thus marks an important step in the country's economic reform, reconciling sustainable development, social equity, and resource diversification.
October 9, 2025 | 
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