Algeria raises electricity VAT on oil price fall

Thu 3rd Dec 2015

In its 2016 budget, Algeria has announced plans to raise the VAT rate on electricity from the reduced rate of 7% to the standard VAT rate of 17%. The same rate change will be applied to the supply of internet services.

The change is part of a range of measures introduced to help cope with the loss of revenues from the halving of oil prices to below $50 per barrel in the past 12 months. This has resulted in the country losing $8 billion in oil duty revenues in the last year.

Algeria faces severe cuts in spending programs, including postponement of several major infrastructure projects. The levels of subsidies on domestic fuel prices will also have to be curtailed.