During a plenary session chaired by Lower House Speaker Slimane Chenine, attended by Minister of Energy Mohamed Arkab and Minister of Relations with the Parliament Fethi Khouil, Loukal outlined the draft amendment which provides for the review of Article 18 of the current law, stipulating that "only the finance laws lay down provisions relating to land bases, rates and modalities of tax collection and to the tax exemption."
However, for the new bill on hydrocarbons, currently debated in the Lower House, to include fiscal provisions, the energy ministry proposed the amendment of this Article (18) so the hydrocarbon sector would have its own taxation system, by separating it from the finance laws.
Indeed, a new paragraph has been added to the Article 18 stipulating that the fiscal regime applicable to the future activities in the hydrocarbon sector may be introduced to a "special status" by "excluding the provisions relating to tax exemptions."
The minister said the upcoming activities will include exploration, exploitation and production, adding that this separation is "exceptional" for future hydrocarbon activities.
This amendment is meant to strengthen Sonatrach's role as an economic operator in Algeria’s development, through the introduction of the necessary flexibility in its negotiations with foreign partners in order to revive prospecting and exploration activities, stagnating for years.
Sonatrach direct negotiation with the partners on the details of the taxation applied to partnership contracts, in terms of prospecting and exploration "will give them confidence and put an end to the bureaucracy in this field."
Amended last year following the introduction of substantive reforms, the Organic Law 17-84 on the Finance Laws, authorized, in its Article 13, the possibility of tax legislation in other bills than the laws of Finance, particularly with regard to the Hydrocarbons Law. This possibility was annulled by Article 18 of Law 18-15.