This publication provides recent updates in legislative social security measures leading to the exemption of surcharges and penalties, related to unpaid social security contributions in Algeria.
In its edition of September 13, 2021, the Official Gazette No. 13 published the Order n° 21-12 dated August 25, 2021 relating to exceptional measures in favor of employers and self-employed persons carrying out an activity on their own account, liable for social security contributions.
The purpose of the order is to put in place exceptional measures for the benefit of employers, liable for social security contributions, as part of the efforts of the State in dealing with the economic effects of the Covid-19 pandemic and for the support of economic operators in the recovery of the national economy, in terms of payment of contributions, exemption from surcharges and penalties and protection of employment.
In an earlier press release, the Algerian Government announced that it decided the cancellation of penalties for late payment of contributions to the Social Security Fund in favor of 760 552 employers, while encouraging contributions to the funds of Social Security in order to preserve the economic environment.
Due to the sanitary crisis, several companies have been facing cash flow difficulties, consequently not being able to pay, in time, their contributions to the National Fund for Social Insurance of Employees (CNAS). Delays and default of payment led to the application of penalties and surcharges, and in some cases the suspension of deductions from which they benefit during the initial recruitment of workers.
Order N° 21-12 is very timely and should prevent employers from being put in a worse cash position.
The Order addresses three (3) different cases, where,
1- Employers can benefit from a schedule for the payment of these contributions, together with the exemption from late payment increases and penalties, after the last due payment, subject to the payment of the outstanding social security contribution and to the filing of a payment schedule request for previous contributions no later than January 31, 2022.
2- Employers can enjoy the exemption from late payment increases and penalties when they pay all prior major contributions in one lump sum or those who are in the process of paying by installment.
3- Employers can enjoy the same exemptions, when they are liable only for late payment surcharges and penalties, provided that they pay the outstanding social security contributions for which they are accountable.
These exceptional measures, which are also applicable to self-employed persons, are an immediate action from the public authorities to preserve employment.
At the beginning of the pandemic, supporting measures were limited to the extension of payment deadlines, but now these new provisions are in line with what has already been undertaken by the tax authorities, which are also processing, in this context, applications for the forgiveness of tax penalties, fines and surcharges arising from late filing of returns and those relating to late payment of duties due.
Samir Hadj Ali – Managing Partner
