COMBATING TAX EVASION IN ALGERIA: AN ANALYSIS OF THE STRUCTURAL CHALLENGES TO IMPLEMENTING INTERNATIONAL COMMITMENTS
Widad Benzine
E-mail:widad.benzine@univ-constantine2.dz
Assistant Professor Abdelhamid Mehri – Constantine2 University
Constantine, Algeria
https://orcid.org/0000-0002-8164-382X
Abstract: This study aims to diagnose the structural challenges that hinder Algeria's effective implementation of its international commitments to combat tax evasion. While Algeria has formally adopted key global frameworks like the Automatic Exchange of Information (AEOI) and the Base Erosion and Profit Shifting (BEPS) project, a critical gap often emerges between such policy adoption and practical, on-the-ground enforcement. This paper investigates this "implementation gap" by first outlining the core operational requirements - technological, human, and regulatory - that these demanding international standards impose on any participating nation. It then provides a contextual analysis of the Algerian landscape, assessing the country's existing institutional capacity against these global benchmarks to systematically identify the key factors contributing to the gap.
The study concludes that Algeria's formal commitment is significantly constrained by four major, interconnected structural challenges. First, an underdeveloped digital infrastructure limits the country's ability to meet the rigorous data exchange and security protocols mandated by AEOI. This limitation also affects coordination across departments and real-time processing. Second, the tax administration suffers from a critical human capital deficit, lacking the specialized expertise required to effectively audit complex multinational corporations. Third, the domestic regulatory framework is characterized by instability and complexity, creating legal uncertainty for both taxpayers and administrators. Finally, the persistence of a large informal economy erodes the national tax base, forcing tax authorities to prioritize widespread domestic non-compliance over complex international tax matters. These deep-rooted obstacles collectively prevent the country from fully translating its international commitments into effective enforcement, highlighting that true progress depends on building genuine institutional capacity.
Keywords: Tax Evasion, Algeria, Domestic Laws, Institutional Capacity, International Agreements.
JEL classification: H26, H87, F53, K34
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References
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Hayoula, I., & Abdat, M. (2023). Evaluation of the Algerian tax system performance after tax reforms. Management & Economics Reseach Journal, 5(2), 1‑25.
Henn, M. (2013). Tax Havens and the Taxation of Transnational Corporations. Friedrich-Ebert-Stiftung, 1‑14.
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Lachlah, S., & Bourennane, M. (2024). Tax Control and Tax Collection Procedures under the Algerian Tax System. Journal of El-Maqrizi for Economic and Financial Studies Volume:08/, 8(2), 471‑490.
Matras, T. (2023). Analysis of the Functioning of the Automatic Exchange of Information about Financial Accounts after Implementation of the Common Reporting Standard. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, 67(1), 106‑117. https://doi.org/10.15611/pn.2023.1.07
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Sandmo, A. (2004). The theory of tax evasion: A retrospective view. National tax journal, 58(4), 643‑663.
Scarfone, J., & Kerr, M. (2018). Liberated Arts: A Journal for Undergraduate Research Paved Paradise: Analysis of the Common Reporting Standard to Combat Tax Avoidance. Liberated Arts: A Journal for Undergraduate Research, 4(1), 1‑12. https://ojs.lib.uwo.ca/index.php/lajur
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Valderrama, I. M. (2018). Output Legitimacy deficits of the BEPS inclusive framework. Bulletin for International Taxation, 72(3), 2‑13.
Almi, H., & Mehadjebia, N. (2023). Assessing Algeria’s Local Taxation: An Analysis of Current Realities and Emerging Challenges. Journal Of North African Economies, 19(33), 203‑220.
Alstadsæter, A., Godar, S., Nicolaides, P., & Zucman, G. (2024). Global tax evasion: Report 2024. EU Tax Observatory. https://www.taxobservatory.eu/www-site/uploads/2023/10/global_tax_evasion_report_24.pdf
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Beer, S., Coelho, M., & Leduc, S. (2019). Hidden Treasure: The Impact of Automatic Exchange of Information on Cross-Border Tax Evasion (p. 1‑32). International Monetary Fund.
Bilicka, K. A., Dubinina, E., & Janský, P. (2023). Fiscal Consequences of Corporate Tax Avoidance. EU Tax Observatory Working Paper, 18, 1‑61. https://www.econstor.eu/bitstream/10419/286342/1/wp-2023-13.pdf
Bouderra, F., & Ait Bachir, L. (2024). Analysis of the tax structure and system in Algeria: A study of challenges and risks in the context of legislative reforms. The International Tax Journal, 51(6), 264‑277. https://internationaltaxjournal.online/index.php/itj/article/view/90%0AThe
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Chipanda, B. (2025). Algeria: Geographic Futures. AFRICAN FUTURES & INNOVATION PROGRAMME. https://futures.issafrica.org/geographic/countries/algeria/
Christians, A., & Shay, S. (2017). Assessing BEPS: origins, standards, and responses. In cahiers de droit fi scal international (Vol. 102).
Chylak, A. (2018). International tax avoidance - attempt to define the concept and to distinguish it from international tax evasion and international tax planning. TORUN BUSINESS REVIEW, 17(4), 21‑38.
Cobham, A., & Gibson, L. (2016). Ending the Era of Tax Heavens. In Oxfam GB (Numéro March). www.oxfam.org
Dabla-Norris, E., Gradstein, M., Miryugin, F., & Misch, F. (2019). Productivity and Tax Evasion (p. 1‑33). International Monetary Fund. https://www.econstor.eu/bitstream/10419/215004/1/cesifo1_wp8002.pdf
Simone, L. De, Lester, R., & Markle, K. (2017). Transparency and Tax Evasion: Evidence from the Foreign Account Tax Compliance Act (FATCA). Journal of Accounting Research, 58(1), 105‑153. https://ntanet.org/wp-content/uploads/proceedings/2017/NTA2017-97.pdf
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DGI. (2023). Fiscalité des entreprises étrangères. https://www.mfdgi.gov.dz/fr/professionnels/services-pro/regimes-fiscaux-speciaux/fiscalite-des-entreprises-etrangeres DGI. (2025a). Code des impôts directs et taxes assimilées. https://www.mfdgi.gov.dz/fr/?preview=1&option=com_dropfiles&format=&task=frontfile.download&catid=777&id=2530&Itemid=1000000000000
DGI. (2025b). Conventions fiscales. https://www.mfdgi.gov.dz/fr/legislation-fiscale/convention-fiscales-internationales?view=frontlist&catid[0]=532
Duarte, D., & Barros, V. (2018). Corporate tax avoidance and profitability followed by mergers and acquisitions. Corporate Ownership and Control, 15(2), 148‑160. https://doi.org/10.22495/cocv15i2c1p2
Eccleston, R., & Gray, F. (2014). Foreign Accounts Tax Compliance Act and American Leadership in the Campaign against International Tax Evasion: Revolution or False Dawn? Global Policy, 5(3), 321‑333. https://doi.org/10.1111/1758-5899.12122
Gravelle, J. G., & Marples, D. J. (2022). The Foreign Account Tax Compliance Act (FATCA). Congressional Research Service (CRS).
Hammouche, R. (2024). The impact of digitalization on Algerian tax administration: improving efficiency and reducing costs. International Journal of Professional Business Review, 9(11), 01‑21.
Hayoula, I., & Abdat, M. (2023). Evaluation of the Algerian tax system performance after tax reforms. Management & Economics Reseach Journal, 5(2), 1‑25.
Henn, M. (2013). Tax Havens and the Taxation of Transnational Corporations. Friedrich-Ebert-Stiftung, 1‑14.
Herzfeld, M. (2017). The Case Against BEPS: Lessons for Tax Coordination. In Florida Tax Review (Vol. 21, Numéro 1). https://doi.org/10.5744/ftr.2017.0001
Huiskers-Stoop, E., Breuer, A., & Nieuweboer, M. (2022). Exchange of Information, Tax Confidentiality, Privacy and Data Protection from an EU Perspective. Erasmus Law Review, 15(2), 86‑99. https://doi.org/10.5553/ELR.000225
IMF, OECD, UN, & WBG. (2020). The platform for collaboration on tax: Toolkit on tax treaty negotiations. https://documents1.worldbank.org/curated/en/478171638947017925/pdf/The-Platform-for-Collaboration-on-Tax-Toolkit-on-Tax-Treaty-Negotiations.pdf
Jovanović, A. (2022). Combating the criminal offense of tax evasion as a key factor in the fight against the « grey » economy. Ekonomika, 68(4), 81‑93. https://doi.org/10.5937/ekonomika2204081j
Lachlah, S., & Bourennane, M. (2024). Tax Control and Tax Collection Procedures under the Algerian Tax System. Journal of El-Maqrizi for Economic and Financial Studies Volume:08/, 8(2), 471‑490.
Matras, T. (2023). Analysis of the Functioning of the Automatic Exchange of Information about Financial Accounts after Implementation of the Common Reporting Standard. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, 67(1), 106‑117. https://doi.org/10.15611/pn.2023.1.07
Ministère des Finances. (2024). Signature de la Convention Multilatérale pour la Mise en œuvre des Mesures Relatives aux Conventions Fiscales pour Prévenir l’érosion De La Base D’imposition Et Le Transfert De Bénéfices (Instrument Multilatéral Beps). https://www.mf.gov.dz/index.php/fr/activites-2/1811-signature-de-la-convention-multilaterale-pour-la-mise-en-oeuvre-des-mesures-relatives-aux-conventions-fiscales-pour-prevenir-l-erosion-de-la-base-d-imposition-et-le-transfert-de-benefices-instrument-mult
Ntiamoah, J. A., & Asare, J. (2022). Economic versus Non-Economic Factors: Which is More Relevant to an Individual’s Tax Compliance Decisions in a Developing Economy? Universal Journal of Accounting and Finance, 10(1), 181‑190. https://doi.org/10.13189/ujaf.2022.100119
O’Sullivan, D., & Gómez, A. C. (2022). The Global Minimum Tax : from agreement to implementation.
OECD. (s. d.). Base erosion and profit shifting (BEPS). Accessed March 12, 2025, from https://www.oecd.org/en/topics/policy-issues/base-erosion-and-profit-shifting-beps.html
OECD. (2002). Agreement on Exchange of Information in Tax Matters. OECD. https://doi.org/10.1787/9789264034853-en
OECD. (2017a). Articles of the model tax convention with respect to taxes on income and on capital.
OECD. (2017b). Standard for Automatic Exchange of Financial Account Information in Tax Matters (2ed éd.). OECD Publishing, Paris. https://doi.org/10.1787/9789264267992-en
OECD. (2018). Standard forAutomatic Exchange of Financial Information in Tax Matters: Implementation Handbook (2nd éd.). https://www.oecd.org/tax/exchange-of-tax-information/implementation-handbook-standard-for-automatic-exchange-of-financial-information-in-tax-matters.pdf
OECD. (2020). Tax challenges arising from digitalisation - report on pillar one blueprint : inclusive framework on BEPS. OECD Publishing, Paris. https://www.oecd.org/tax/beps/tax-challenges-arising-from-digitalisation-report-on-pillar-one-blueprint-beba0634-en.htm
Otto, F., Michael, F., Philipp, G., Gertraud, L., Martina, N., & Martin, S. (2015). Tax Avoidance, Tax Evasion and Tax Havens. Gerechtigkeit Muss Sein, May, 5. https://www.rybn.org/thegreatoffshore/THE GREAT OFFSHORE/7.RESOURCES/ACADEMIC PAPERS/TAX AVOIDANCE/Tax Avoidance, Tax Evasion And Tax Havens.pdf
Pandoyo. (2025). Tax avoidance and evasion: Trends, Challenges, and Policy solutions. Sinergi International Journal of Accounting & Taxation, 3(1), 54‑66.
Pandya, E. J., & Shah, K. V. (2013). Contract Manufacturing in Pharma Industry. Pharma science monitor, 4(April 2013), 123‑144. www.pharmasm.com
Pickering, A. (2013). Why Negotiate Tax Treaties. In Papers on Selected Topics in Negotiation of Tax Treaties for Developing Countries (Numéro 1). https://static.un.org/esa/ffd/wp-content/uploads/2013/05/20130530_Paper1N_Pickering.pdf
Rezigat, B., Zergoune, M., & Bouakaz, Y. (2025). The reality of digital transformation in the tax sector in Algeria (Strategy and Challenges). International Journal of Economic Perspectives, 19(05), 1972‑1985. https://ijeponline.org/index.php/journal/article/view/1022
Sandmo, A. (2004). The theory of tax evasion: A retrospective view. National tax journal, 58(4), 643‑663.
Scarfone, J., & Kerr, M. (2018). Liberated Arts: A Journal for Undergraduate Research Paved Paradise: Analysis of the Common Reporting Standard to Combat Tax Avoidance. Liberated Arts: A Journal for Undergraduate Research, 4(1), 1‑12. https://ojs.lib.uwo.ca/index.php/lajur
Senator, K. (2019). Challenges of the new organization of the tax administration in Algeria. Journal of Tax Administration, 5(2), 113‑124.
Tax Justice Network. (2024). State of Tax Justice 2024 (Numéro November).
Turner, G. (2017). Shifting profits and dodging taxes using debt. The Tax Justice Network. https://www.taxjustice.net/wp-content/uploads/2017/11/Dodging-taxes-with-debt-TJN-Briefing.pdf
Valderrama, I. M. (2018). Output Legitimacy deficits of the BEPS inclusive framework. Bulletin for International Taxation, 72(3), 2‑13.
Published
2025-11-06
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