ALGIERS- The 2023 Finance Law, signed on Sunday by the President of the Republic, Supreme Head of the Armed Forces, Minister of National Defence, Mr. Abdelmadjid Tebboune, includes a series of measures both in support of investment and in the fiscal sphere, within the framework of a new budgetary approach centered on the objectives and this for greater efficiency and transparency.
This is the first finance law drawn up under organic law 18/15 relating to finance laws, which in particular enshrines budget forecasting over a three-year period.
The text advocates in particular the continuation of the State’s effort to control its financial balances, the encouragement of investment, the consolidation of social achievements while continuing the dynamics of growth.
This is how the law introduces, in its article 9, a simplification of the procedure obliging investors to reinvest 30% of the amounts corresponding to the exemptions under the corporate income tax (IBS) and the tax on the professional activity (TAP), granted within the framework of aid schemes, while granting them the possibility of investing or making placements in start-ups or incubators.
Are also exempted from the obligation to reinvest these tax advantages, companies created within the framework of partnership between public or private companies with foreign ones.
In addition, natural persons with a turnover of less than 5 million Da/year will be eligible for the law on auto-entrepreneurs, while subjecting them to the single flat-rate tax (IFU) at the rate of 5%. on the turnover whatever the nature of their activity, according to this text of law.
The objective of this measure (article 49) is to promote the entrepreneurial spirit and to facilitate young people’s access to the labor market, in particular through self-employment.
In addition, it was authorized to proceed with the customs clearance of chains and production materials less than 5 years old and agricultural equipment and materials less than 7 years old, after the amendments voted by the APN.
Still in the investment chapter, the text also provides for the reduction of tax burdens concerning the tax on vehicles for transporting company personnel and exemption from IBS for fishing and aquaculture cooperatives and approved federations.
This exemption also includes interest from deposits in Islamic finance-type investment accounts from January 1, 2023, for a period of 5 years, according to the amendments validated by the deputies.
In the context of tax inclusion, the LF 2023 introduces an adaptation of the ceilings linked to the exercise of the right to tax withholding of fees, the payment of taxes through banking channels via scriptural means, by stopping the ceiling at up to one million Da, with a view to strengthening financial and economic inclusion and supporting the efforts of the tax administration in the fight against money laundering.
Such procedures also make it possible to reduce the risks that may arise from the use of counterfeit notes and to absorb worn notes.
On the other hand, the law introduces a simplification of the importation of tourist vehicles less than three years old with tax advantages depending on the type and motorization of the vehicle, by removing the condition of limiting this importation once every three years.
It will therefore be authorized to proceed with the customs clearance of tourist vehicles less than three years old and imported by resident individuals for personal use, with payment of all duties and taxes provided for under public law.
In the field of foreign trade, the field of tax exemptions will be extended to import operations of hybrid and electric vehicles, as well as the exemption of the import of goods, within the framework of border barter , the preventive provisional additional tax.
In the area of housing, the Public Treasury has been authorized to cover 100% of the subsidized interest rate as part of the construction of an additional tranche of housing in the AADL formula.
2023 Finance Law: medium-term macroeconomic and budgetary framework
Here are the main indicators of the macroeconomic and budgetary framework of the finance law for the year 2023 with forecasts for the years 2024 and 2025, signed, Sunday, by the President of the Republic, Supreme Head of the Armed Forces, Minister of Defense national, Mr. Abdelmadjid Tebboune.
– The reference price of a barrel of crude oil is 60 dollars for the period 2023-2025.
– The market price of a barrel of crude oil is 70 dollars for the period 2023-2025.
– The inflation rate is expected to slow to 5.1% in 2023, 4.5% in 2024 and 4% in 2025.
– The economic growth rate should reach 4.1% in 2023, 4.4% in 2024 and 4.6% in 2025.
– Revenue from goods exports is expected to reach $46.3 billion in 2023, $46.4 billion in 2024 and $45.8 billion in 2025.
– Imports of goods are expected to decrease to $36.9 billion in 2023 (-4.2% compared to 2022), to $35 billion in 2024 and to $34.2 billion in 2025.
– The trade balance should register a surplus of 9.4 billion dollars in 2023, then 11.3 billion dollars in 2024 and 11.6 billion dollars in 2025.
– The balance of payments is expected to register a surplus of $5.7 billion in 2023, reach $6.5 billion in 2024 and $6.8 billion by the end of 2025.
– Foreign exchange reserves should increase from 59.7 billion dollars at the end of 2023 to 69 billion dollars at the end of 2025, representing respectively 16.3 and 19.3 months of imports of goods and services excluding production factors.
– Total projected budget revenue between 2023 and 2025 would increase by 4% on average to reach 7,901.9 billion dinars in 2023, 8,187.2 billion dinars in 2024 and 8,454.6 billion dinars in 2025.
– Oil taxation contained in the budget should increase between 2023 and 2025 at an annual average of 2.9%, estimated on the basis of a reference price of 60 dollars per barrel, to go from 3,298.5 billion DA in 2023 to 3,409.6 billion DA in 2024 and 3,502.2 billion DA in 2025.
– Ordinary resources are expected to grow by 4.8% on average over the period 2023-2025, mainly resulting from the increase in tax revenues (about +6.6% on average between 2023 and 2025). Ordinary resources should increase from 4,603.4 billion DA in 2023 to 4,777.6 billion DA and 4,952.4 billion DA in 2025.
– Budgetary expenditure should amount to 13,786.8 billion DA in 2023, 13,918.4 billion DA in 2024 and 13,998.4 billion DA in 2025.
– Operating expenses should increase by 26.9% in 2023 to reach 9,767.6 billion DA and an average rate of 3.5% between 2024 and 2025.
– Capital expenditure should increase in 2023 by 2.7% compared to 2022 and would experience a decrease of 9.7% in 2024 and a decrease of 2.5% in 2025.
– Equipment expenditure will have to increase from 4,019.3 billion DA in 2023 to 3,538.4 billion DA in 2025.
– Program authorizations should amount to 3,259.65 billion DA and payment appropriations will reach 4,019.28 billion DA in 2023.
– The budget deficit for the year 2023 will reach 5,884.9 billion DA (-22.5% of the Gross Domestic Product), with an average value of 5,720 billion DA during the period 2023-2025 (-20.6 % of GDP).
– The overall Treasury deficit should reach an average of 6,586.3 billion DA during the period 2023-2025 (-23.7 of GDP).
Translated from APS
