Algeria Tax Authority Pursues Tax Evaders in Public Contracts

The Algerian Tax Authority is conducting investigations into over 137 contractors suspected of evading taxes on public contracts valued at 283 million dinars. The authority has expanded its inquiries into transactions concluded with public administrations, institutions, and local communities since the beginning of the year. Initial audits revealed indications of undeclared contracts and manipulation of contract values to reduce tax liabilities.

Tax inspectors are reviewing the financial and tax records of the contractors, matching the amounts in the contracts with the declarations filed with the tax administration. The focus is on ensuring compliance with the 0.1% registration fee on the total contract value, including associated taxes and charges.

The investigations cover contracts with public administrations, institutions, and local communities. Tax authorities have requested documents proving registration and performance, as well as financial statements related to contract execution. This is to verify compliance with new tax obligations, especially in cases where registration documents are missing or there are discrepancies between submitted documents and filed declarations.

The tax authority is also scrutinizing contract amendments that occurred after the original contracts were signed, without settling additional registration fees. The authority distinguishes between amendments that do not increase the contract value and those that require applying the relative fee of 0.1% on the increased amount. This distinction helps determine the applicable fees and arrange for legal settlement procedures.

Investigators have reviewed the financial bases used to calculate the fees, finding that some contractors reported amounts lower than the total contract value, including taxes and charges. Others failed to account for increases resulting from quantity, work, or service adjustments, suggesting incomplete declarations that reduced the tax liabilities owed to the treasury. The total value of the unpaid amounts has not yet been determined.