Algeria: Tax reforms to lower Islamic banking costs within two months

Soufiane Mezari, a member of the Islamic Banking Committee at the Professional Association of Banks and Financial Institutions, announced that the 2027 Finance Bill includes measures to eliminate tax disparities between Islamic and conventional finance. This reform will remove additional fees and dual taxation burdens on Islamic transactions, effectively lowering costs for customers within 60 days. The move aims to ensure fair competition and provide consumers with greater financial choice. The Islamic banking sector in Algeria is currently growing by over 20% annually, capturing 6% to 7% of the market, with expectations to reach 8% soon. With 13 banks currently offering Sharia-compliant services, the market is expanding to include various products like international Visa cards. Mezari noted that while individuals and SMEs are the primary users of these services, Islamic and conventional banking remain complementary, both serving different economic needs through distinct contractual mechanisms like Murabaha.