The government is proposing to abolish a pollution tax which is currently collected on the behalf of the tax authorities by insurers from customers who purchase a motor insurance policy.
The abolition will be provided for in the 2021 finance law which covers the state Budget. One reason for abolishing the tax is that it has affected insurers' financial results, reported Algeria360.
The 2020 finance law introduced the pollution tax which took effect from 1 January this year. Insurers had protested without success against being made collectors of the tax.
According to the National Insurance Council (CNA), this tax has hit the motor business. During 1H2020, motor insurance premium income decreased by 10% compared to the corresponding half last year. due to its impact on insurers' results.
However, the pollution tax is not the only reason for the fall in motor premiums. The CNA says that the COVID-19 lockdown on activities, the closure of some insurance offices, and the suspension of operations at automobile assembly plants are also factors impacting negatively on motor insurers.
The tax is levied on all motor insurance policies and amounts to DZD1,500 ($12) for passenger vehicles and DZD3,000 for other vehicles.
The government says that the decline in the turnover of insurance companies could "on the one hand, jeopardise an entire sector of activity which is essential for all other sectors of activity, and on the other hand, reduce the amount of tax revenue”.