Algiers – Algeria’s Finance Law for 2025, signed by President Abdelmadjid Tebboune on Sunday, introduces a range of initiatives aimed at bolstering the national economy and improving citizens’ living conditions. This comprehensive law combines measures to promote investment, stimulate economic growth, and support Algerians’ purchasing power through targeted social and fiscal policies.
Economic Reforms and Investment Incentives
The 2025 Finance Law authorizes the issuance of sovereign sukuk by the Public Treasury. These Islamic bonds will allow both individuals and legal entities to participate in financing state-owned commercial infrastructure. To encourage participation, the law grants a five-year exemption from personal income tax (IRG) or corporate profits tax (IBS) on sukuk returns. Additionally, these sukuk are exempt from registration and real estate publicity fees for the same duration.
Further, the law extends a 50% reduction in income or corporate profits taxes for income generated in Algeria’s southern regions for another five years.
For innovative and emerging businesses, tax relief is also prioritized. Startups, “innovative project” holders, and incubators will benefit from extended exemptions on property acquisition and company registration fees, with additional benefits for renewed certifications.
In a bid to boost investments, the National Investment Fund (FNI) will see its capital increase from 150 billion DZD to 275 billion DZD. Guarantees by the SME Loan Guarantee Fund (FGAR) will also be expanded to cover all types of loans, not just investment loans.
Social Measures and Housing Support
The Finance Law for 2025 incorporates significant social measures, particularly in the housing sector. The Treasury will subsidize interest during loan deferrals and fully cover interest rates on public bank loans for the construction of 135,000 rent-to-own housing units scheduled for 2025.
For beneficiaries of the “AADL 03” program, the law offers a 10% discount for those who have already paid 38% of their housing cost and wish to settle the remaining amount in advance. This discount is calculated on the outstanding balance of the rent-to-own arrangement.
Additionally, the scope of consumer loans provided by banks has been expanded to include not only goods but also services such as healthcare and travel.
Fiscal Relief to Strengthen Purchasing Power
To mitigate inflation and support household budgets, the law exempts frozen white meat imports from VAT between January 8, 2024, and December 31, 2025. It also extends VAT exemptions on locally produced and imported dry pulses, rice, fresh fruits and vegetables, eggs, and poultry through 2025.
Customs duties on livestock and certain fresh meat imports will remain reduced to 5% until December 31, 2025. This reduction has also been expanded to include sheep imports.
The government has reinforced its commitment to broadening the tax base while offering incentives to key economic sectors. Notably, no new taxes have been introduced under this law.
Macroeconomic Framework for 2025
Key macroeconomic and budgetary indicators for the 2025 Finance Law include:
- Oil Benchmark Price: $60 per barrel (2025–2027)
- Market Price of Oil: $70 per barrel (2025–2027)
- Economic Growth Rate: 4.5% (2025 and 2026); 5% non-hydrocarbon growth in 2025
- Nominal GDP: 37,863 billion DZD ($278.71 billion)
- Export Revenue: $50.9 billion
- Import Costs: $46.07 billion
- Trade Surplus: $4.83 billion
- Balance of Payments Surplus: $1.17 billion
- Foreign Exchange Reserves: $72.95 billion (covering 16 months of imports)
- Budget Revenues: Increase by 3.5% to 8,523.06 billion DZD
- Petroleum Tax Revenue: 3,453.96 billion DZD
- Budget Expenditures: Increase by 9.9% to 16,794.61 billion DZD
- Budget Deficit: 8,271.55 billion DZD
The Finance Law for 2025 stands as a testament to Algeria’s dedication to economic resilience and societal progress, setting a robust framework for sustained growth and development.
For detailed coverage on Algeria’s economic strategies, visit DZWATCH.DZ.
Author: Nor-Eleslam
Phrase: Algeria Finance Law 2025, economic growth, social reforms, fiscal policies
