Page 68 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.81, # 2, 2024, pp. 60-83

To qualify for the benefits of this law, a person must be Algerian or a resident
foreigner, of legal working age, and engaged in activities eligible for the law’s
benefits. The self-employed contractor may operate from their residence or shared
workspaces, and under no circumstances can the personal or family residence be
seized due to debts or damages resulting from the activity (Law 22-23, 2022).

Several privileges are granted to individuals acquiring the status of a self-employed
contractor, including exemption from mandatory registration in the commercial
register, access to social welfare benefits, and a preferential tax system with a flat tax
of 0.5% on the declared annual turnover. Additionally, the self-employed contractor
is allowed to open a commercial bank account and is provided with all the necessary
facilities to do so (Law 22-23, 2022).

On the other hand, there are a set of obligations imposed on individuals who hold the
status of a self-employed contractor. They must register in the National Register of Self-
employed Contractors at the National Agency for Self-employed Contractors or through
the digital platform to obtain a self-employed contractor’s card. In addition, they are
required to declare their existence to the tax authorities and report their annual turnover,
which should not exceed five million Algerian dinars (Law 22-23, 2022), equivalent to
€33,500 (exchange rate as of August 28, 2024: 1 DZD = 0.0067 EUR). Moreover, the
self-employed contractor must pay tax dues according to the tax legislation and
regulations and contribute to the social security system for non-salaried workers, which
has reduced contributions compared to other sectors, amounting to 24,000 Algerian dinars
annually instead of 32,400 DZD. If the annual turnover exceeds five million dinars for
three consecutive years, the self-employed contractor must register in the commercial
register if they wish to continue their activity (Law 22-23, 2022).

METHODOLOGY
This research paper relied on the descriptive-analytical approach to highlight the
reality of freelance work and self-employment in Algeria and their role in raising
indicators of the informal economy. It also focuses on the content of the recently
legislated self-employed contractor's basic law and examines its ability to encompass
the activities of freelance and self-employed Algerian workers.

The study employed the methodology of the discrepancy between formal and actual
labor force as an indicator to measure the size of the informal economy (Schneider &
Buehn, 2016). Additionally, it relied on the concept of informal labor, as defined by
International Labour Organization, which considers informal workers to be those not
belonging to any regulatory or legal body in the country. In Algeria, informal
employment is defined as those not enrolled in the Algerian National Social Security
Fund (National Office of Statistics, 2016).

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