Taxes and duties are determined by law, according to Article 64 of the constitution. Article 122 grants the parliament the power to legislate tax rates and customs duties as well as the state budget. The annual budget must be passed by both houses of parliament. However, the budget omits information about the Special Treasury Accounts, of which there are some sixty including the Local Governments Solidarity Fund, the National Housing Fund, and the National Fund for Agricultural Regulation and Development. Although some information about some outlays to local government is available, their total receipts and expenditures are not published. Article 160 of the constitution stipulates that the government present each house of parliament a report on the use of the budgetary credits that it voted, and that parliament vote to close the financial year in question, but no budget review law has been submitted to Parliament since 1985.
The World Bank is currently underwriting a five year project that began in 2001 for purposes of budget modernization. There are three main purposes of the project: providing a comprehensive statement of public resource distribution; establishing a framework for crucial expenses while using the best information available; and promoting efficiency in budget execution, while allowing for informed feedback on fiscal matters.
Record oil and gas revenues have enabled the government to plan spending $55 billion expenditure on public works 2005-2009, thus highlighting the need for financial transparency. Revenues from oil and gas make up roughly two-thirds of government revenue, but the IMF has recommended that the Fonds de Regulation des Recettes, the current off-budget oil stabilization fund, be integrated into the budget to insure greater transparency and to build up reserves to offset eventual declines in oil and gas revenues. Oil revenues offset a primary budget deficit amounting to 31.8% of non-hydrocarbon GDP in 2004.
Article 170 of the Constitution stipulates that a National Audit Court (Cour des Comptes) is a posteriori to control the finances of the State, the territorial collectivities and public services and to issue a yearly report to the President of the Republic. Article 16 of Order No. 95-20 of 17 July 1995 also requires that a copy be given to the National People’s Assembly and published in part in the Journal Officiel. As of 2005 the most recent yearly report to be published was for 1997. However, a presidential ordinance promulgated on February 28, 2008, after approval by parliament, strengthens the authority of Ministry of Finance’s inspection bureau over public sector enterprises.
Government procurement is supposed to be governed by the Law on Public Tenders rather than "private agreement", prohibited in a speech given by the president in April 2005. Government contracts for large projects are now awarded after a three step process: 1) a short list is created based only on the technical merits of the proposals submitted by the bidders; 2) the Algerian client redefines the project's specifications based upon the proposals received; and 3) the bidder with the lowest price for the redefined specifications gets the contract. State-owned companies are not required to purchase goods and services through tenders, but many of them do.
The Bank of Algeria, Algeria’s central bank, governs financial transactions in the country under the auspices of several regulations, namely: Law 90-10 of 1990, dictating currency and credit; measures of the Code of Commerce; and related regulations treating banking, including Islamic banking. Law 90-10 was amended in 2001 so as to enable the president to appoint the governor and vice-governor of the bank to serve without fixed terms of office. The government has taken steps to modernize the financial sector through overhauling outdated banking management methods, improving the standards of services, improving the banking audit and reactivating payment systems, and computerizing banking services.
Four large public sector banks, headed by the Banque Nationale d'Algérie, dominate Algeria's commercial banking system. Efforts are continuing to restructure their balance sheets so as to write off the non-performing loans of public sector enterprises, and one of them the CPA, is slated for privatization. Law No. 05-01, Algeria’s first anti-money laundering legislation, was issued on February 6, 2005, and published in the Journal Officiel of February 9. It being implemented with technical assistance from the Bank of France and the World Bank. In December 2004 a unit appointed by presidential decree began operations in the Ministry of Finance to detect any suspicious banking or financial operations.
El-Khalifa Bank, the largest of Algeria’s private banks, became the subject of a massive banking scandal in early 2003 after its founder used the bank to funnel cash to his failing businesses. El-Khalifa held accounts on deposit for numerous public agencies, and many of the bank’s high ranking officials were closely related to senior government officials. Reports dating back to 2001 implicated the institution of violating banking laws on movement and use of capital, but no action was taken until 2003. The government estimates the cost to the public at US$ 1.5 billion. At least two other private banks failed, leaving the private sector with few survivors. In June 2003 the Banque Commerciale et Industrielle d’Algérie (BCIA) was closed after being accused of fraudulent export-import operations losing up to $100 million. The Union des Banques was also shut down.
The Algerian Stock market was established by Legislative Decree No. 93-10 in May 1993. It is managed by the Societe de Gestion de la Bourse des Valeurs (SGBV) and supervised by the Stock Exchange and Surveillance Commission. Three companies, including the Hotel Aurassi, are listed on the exchange.
Trading occurs for a half morning each week. No recent records are available, which is an indication of the stock market’s stagnancy.
The Centre de Recherche en Economie Appliquée pour le Développement (CREAD), recognized by a presidential decree in 1985, gained further legal recognition in executive decree n°03-455 of December 1, 2003, as Algeria’s prime research institute engaged in the area of applied economics.
International Transparency Standards
Algeria is a signatory of the OECD Convention to Fight Bribery.
Algeria began participating in IMF’s General Data Dissemination System (GDDS) in April 2009 and has engaged with the IMF and World Bank in publishing Reports on the Observance of Standards and Codes (ROSC) for monetary and financial policy transparency, fiscal transparency, and banking supervision.