News Middle East16 Jan 2020

Algeria:Authorities stand firm on pollution tax on vehicles

16 Jan 2020

The General Directorate of Taxation (DGI) has set the amount of a new pollution tax for this year at DZD1,500 ($12.55) for passenger cars and DZD3,000 for all other vehicles and rolling stock.

The new tax is payable once a year, regardless of the type and duration of the insurance contract, and whether policyholders are individuals or companies, reported the Algerian Press Service.

This new measure entered into force on 8 January 2020, in accordance with the 2020 Finance Law.

The tax is to be collected by insurance companies when policyholders buy or renew their motor insurance, and indicate the payment and the date thereof on the policy.

Insurance companies or their approved agencies must pay the total amount of tax collected during a month during the first 20 days of the following month, and submit a payment advice slip to the taxation authorities.

The tax is to be allocated in the following way: 70% of the amount collected is intended for the State Budget, and the remaining 30% for the solidarity and guarantee fund of local authorities. The reasons for imposing the tax include promoting a green environment and to counter the impact of pollution on health.

Representatives of insurance companies, both government owned and privately held, have asked to be exempted from collecting the tax because they expect it to have a negative impact on motor insurance. The tax is also seen as onerous because 70% of insurance contracts are charged premiums that do not exceed DZD5,000. Insurers have also asked to allow to retain a third of the tax to defray their collection costs, but their demands have so far been unheeded.


 

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