The Algerian auto-entrepreneur card, launched to formalize the growing gig economy, has surpassed a key milestone with 10,000 individuals now registered. However, a surprising trend has emerged: a massive surge in first-time social security registrations among cardholders.
At a recent event with the Minister of Labor, Employment, and Social Security, it was revealed that a staggering 99.28% of auto-entrepreneur cardholders had never been registered for social security. This unexpected result suggests the card’s appeal goes beyond simply formalizing freelance work. Access to social safety nets and benefits may be a primary motivator.
Government’s Goal vs. Reality
The government designed the card to bring freelancers into the formal economy with simplified income verification and benefits. However, social security appears to be the biggest incentive. This unexpected finding underscores the need to fully understand why freelancers are enrolling and how the program can adapt to their needs, potentially expanding its reach.
Understanding the Auto-Entrepreneur Card
The Algerian auto-entrepreneur card recognizes freelancers working in various domains, including consulting, digital services, personal coaching, and cultural activities. By obtaining this card, freelancers can operate within the official economy and gain access to numerous benefits. However, specific examples within each category remain unspecified, and details regarding taxes are still under development. A flat 5% tax rate was initially proposed, but final regulations are pending future financial laws.
How the Auto-Entrepreneur Card Works and Its Benefits
Process of Obtaining the Card
To obtain the auto-entrepreneur card, individuals must engage in a lucrative activity listed as eligible by regulations and maintain an annual turnover not exceeding 5 million DA ($37,200). The process involves registering with the National Register of Auto-Entrepreneurs, obtaining a Tax Identification Number (NIF), and registering with the National Social Security Fund for Non-Employees (CASNOS). The system is regulated by an agency in Algiers under the Ministry of Startups.
Benefits for Freelancers
The card offers several advantages for freelancers, providing financial security and simplifying their professional activities. Key benefits include:
- Social Security Coverage: Access to health insurance and pension contributions through CASNOS.
- Bank Account Access: Eligibility to open a current bank account, improving financial management.
- Simplified Income Proof: The card serves as proof of income, streamlining administrative procedures.
Benefits for Employers
Employers also benefit from the system, gaining flexibility in hiring skilled freelancers and reducing indemnity risks associated with traditional employment contracts.
Current Status and Concerns
Despite the system’s potential, there are still areas requiring further clarification. Recent executive decrees have provided more details, but many Algerian freelancers and employers sampled expressed concerns on comprehensive guidelines on taxation and foreign currency withdrawals.