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Algeria's Zikara Clarifies Aim Of 2014 Budget

by Lorys Charalambous,, Cyprus

08 January 2014

During a recent corporate information day organized by the Algerian Chamber of Commerce and Industry (CACI), Mustapha Zikara, head of tax legislation at the Directorate General of Taxation (DGI), made clear that Algeria's 2014 finance law (LF 2014) aims to boost national production, rather than radically overhaul the tax system.

Algeria's 2014 finance law is intended to promote the stability of the legal framework, and only introduces fiscal measures designed to support and encourage national production, Zikara stressed.

Citing examples, Zikara pointed out that the LF 2014 exempts operators producing nitrogen fertilizer for sale on the domestic market from corporation tax (IBS), and limits value-added tax (VAT) breaks to equipment produced locally, to reduce importations. Furthermore, the law extends provisions exempting stock market securities from capital gains tax for a further five years, and provides that vehicles produced locally are to be exempt from the tax levied on new vehicles, Zikara emphasized.

Finally, Zikara noted that the LF 2014 subjects jewellery imports to VAT, to protect national production, and contains provisions to strengthen the fight against tax evasion. Consequently, to prevent abuse of the legal system, the Algerian Tax Administration will in future be able to re-qualify certain corporate operations for tax purposes, for example in cases where companies have cited transactions as donations rather then sales, to reduce their tax bills.

Commenting, CACI President Tahar Khelil reassured those companies present that the LF 2014 does not introduce new taxes, but merely encourages investment, notably in the South of the country, and supports national production.

TAGS: compliance | tax | investment | value added tax (VAT) | tax compliance | tax avoidance | law | corporation tax | Algeria | legislation | tax breaks | Tax | Tax Evasion

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