Page 76 - Azerbaijan State University of Economics

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

Liberal professions and artisanal activities, under Algerian tax laws, are subject to a
single flat tax ranging between 5% or 12% of the annual turnover, depending on the
type of activity (General Directorate of Taxes, 2023). This tax rate may be one of the
reasons why many freelancers do not engage in the formal economy, whereas
freelancers falling under the self-employed contractor law are subject to a preferential
tax system, which imposes a single flat tax of only 0.5% of annual turnover, in
addition to other previously mentioned benefits. Therefore, it would have been
preferable to give freelancers whose activities are already regulated the option to
choose between adhering to the old legal system and the self-employed contractor
system. This would serve as an incentive for many freelancers to reconsider their
stance and join the formal sector.

On the other hand, one criticism of the self-employed contractor law in Algeria
(according to the researcher) is its reliance on the regulations in each sector to resolve
many contentious issues. Many individuals working for themselves also hold official
positions either in public service or in the public and private economic sectors, and
they carry out their private work remotely or after hours, during weekends, or on
annual holidays. Since Algerian labor law prohibits holding dual jobs, this creates a
significant obstacle to incorporating after-hours activities into the formal sector.

For example, in the field of education in Algeria, many teachers engage in additional
work after their official hours, providing private tutoring sessions to students. These
are additional support lessons offered to students to reinforce their knowledge.
Although the self-employed contractor law includes this activity among those eligible
to benefit from it, teachers in the education sector cannot obtain a self-employed
contractor card due to the law prohibiting dual jobs, which forces them to carry out
this activity within the informal framework.

Private tutoring in the education sector has, in recent years, become a growing trend
among parents, students, and teachers alike, especially in middle and high school
levels. If we consider the number of teachers and students at these two levels, we can
get an idea of the scope of the informal activity resulting from the private work of
teachers after their official hours. Table (07) illustrates this:

Table (07): Number of teachers and students in middle and high schools for the
2021/2022 academic year
Education Stage Learners Teachers
Middle Education 3,394,055 174,329
Secondary Education 1,522,381 112,391
Total 4,916,436 286,720
Source: (National Office of Statistics, 2022).

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