Up to 160% of the price of goods .. parcel taxes are causing a stir in Algeria

The announcement of this value sparked a great controversy among citizens, consumer protection associations and economists, who expressed their concerns about the future of e-marketing in Algeria.

The Finance Law of 2022 subjected goods imported by citizens through the postal parcel service, which reach the recipients via letter mail, postal parcels or express freight parcels, to varying arbitrary fees ranging from 70 to 160 percent.

Consumer Protection warns

This action prompted the National Consumer Guidance Organization for the Protection of E-Commerce, which wrote to the official authorities to reconsider the texts of tax laws imposed on consumers.

The organization recommended the need to re-determine the value of the contents of the parcels, and called on the authorities to establish a classification of products and determine customs tariffs for each category, with the need to exempt parcels destined for researchers, students and inventors after submitting a statement proving the product’s link to the field of research or invention, and urged encouraging digital transformation in Algeria and improving the system Banking to go along with e-commerce.

The head of the Consumer Protection Association in Algeria, Mustafa Zabadi, stressed that these taxes came as a surprise to everyone, especially as they were imposed on postal parcels, which are known to be dealers, not merchants.

Zabdi confirmed to “Sky News Arabia”, that “this measure would harm the future of e-commerce in Algeria, which is experiencing many obstacles, especially with regard to the banking system that still deals with traditional methods.”

The head of the Consumer Protection Association explained that “objection to these taxes does not mean an objection to the idea of ​​protecting national products, as much as emphasizing the need to develop the market, encourage investment and protect the direct consumer of goods.”

Correcting the budget deficit

Experts were divided in reading the feasibility of these decisions, given that the matter takes a political nature, and falls under the category of national sovereignty according to economic need, which reflects the financial policy based on the reality of local production.

Economist Hamid Alwan believes that this type of tax aims mainly to protect locally manufactured products, which does not apply in the Algerian case, which imposed an added value on many materials that it does not manufacture.

Alwan believes that Algeria has set out to impose these taxes “to finance the economy and support the public treasury, which records a deficit of up to 20 billion dollars in the general budget for 2022.”

He told Sky News Arabia: “Given the spending levels that far exceed the rate of imports, Algeria is seeking to return the money circulating in the parallel market, which is a very large cash block estimated by the state at about $90 billion.”

He added, “Reorganizing the movement of this financial bloc would help reduce the economic deficit and reduce the prices of basic materials, which have witnessed a terrible rise in the recent period.

The economic expert warned against exaggerating the imposition of taxes, referring to the economic rule recognized among experts which says that “too many taxes kill taxes,” which reflects the spread of tax evasion, the black market and deals signed outside the law, which have become a normal thing in the Algerian markets. This prompted foreign investors to flee.

Algerian market and taxes

The expert in the field of e-commerce in Algeria, Younes Qarrar, considered that the e-commerce market in Algeria needs more incentives, not taxes, noting that “the increase in taxes led to merchants evading dealing with digital machines in stores, in exchange for a preference for monetary financial transactions.”

The Finance Law stipulated that stores must provide at least one electronic payment device, but the state of the Algerian market and the failure of many citizens and merchants to accept this type of transaction prompted the relevant authorities to postpone the matter until the market is ready.

These measures come at a time when President Abdelmadjid Tebboune stressed the need to improve the purchasing power of citizens, and several incentive measures have recently been taken, including reducing the tax on total income and raising the indicative point in government jobs.

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