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Tax reform in Algeria: IMF recommendations

The International Monetary Fund has identified the untapped potential of 2-4% of GDP in non-hydrocarbon taxation and has outlined an ambitious roadmap for diversifying the country's budget revenues.

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The IMF estimates that Algeria could increase its non-hydrocarbon tax revenues from 10.3% to 13.5% of GDP, representing a gain of 2 to 4 percentage points, by reforming its tax system. This improvement would be based on better use of VAT, corporate tax, excise duties, and property and mining taxes, which could generate more than 1% of GDP.

The report recommends streamlining exemptions, simplifying rates, and removing ineffective tax incentives. It also highlights the importance of strengthening tax administration and continuing digitalization, with the potential to recover 0.6% of GDP per year in tax arrears.

A progressive strategy spanning four to six years is recommended (MTRS), combining fiscal, administrative, and legal reforms. It should be accompanied by structural measures: reducing the use of cash, combating corruption and informality, and promoting financial inclusion.

According to the IMF, this diversification of revenues would strengthen Algeria's fiscal resilience and support the sustainable consolidation of its public finances.

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Tax reform in Algeria: IMF recommendations

The International Monetary Fund has identified the untapped potential of 2-4% of GDP in non-hydrocarbon taxation and has outlined an ambitious roadmap for diversifying the country's budget revenues.

Algeria Invest

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