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* Taxes meant to compensate for lower energy revenues
* Spending to fall for a second straight year
* Opposition lawmakers boycott budget vote
(Adds details, background)
By Hamid Ould Ahmed
ALGIERS, Nov 22 (Reuters) - Algeria's lower house of parliament on Tuesday endorsed a 2017 budget that includes new taxes on goods and fuel subsidy cuts as part of government efforts to offset a fall in energy revenues.
Next year's budget provides for a 14 percent cut in spending, following a 9 percent reduction in 2016, as the OPEC member remains cautious about any recovery in global oil prices.
Oil and gas account for 94 percent of exports and 60 percent of the state budget. Attempts to diversify the economy have largely failed.
The budget is widely expected to get final approval from the Algerian Senate.
Lower oil prices have hit state finances hard. Authorities have used hydrocarbon revenues to subsidise almost everything from food to fuel and medicine to maintain social stability under President Abdelaziz Bouteflika, in power since 1999.
"There are certainly increases (in taxes) ... but, on the other hand, there are a lot of provisions that are there to improve, boost and enhance economic growth," Finance Minister Hadji Baba Ammi told parliament.
Under the new finance law, prices for unleaded gasoline, premium gasoline and regular gasoline will increase by 13.08 percent, 12.94 percent and 14.11 percent per litre respectively and the diesel price by 7.85 percent.
Earlier this year Algeria began to implement its first fuel price increases in more than a decade, though domestic prices for energy products remain very low by international standards. Diesel is currently 18.23 dinars a litre (16 U.S. cents).
TOBACCO TAX
The new budget provides for a rise in value-added tax (VAT) of 2 percent, while taxes on domestic property rentals will increase by between 7 and 10 percent and tobacco prices by between 60 and 100 percent.
Prices for appliances such as air conditioners and washing machines will go up by between 5 and 60 percent, and the cost of advertising for foreign products by 10 percent.
Lawmakers also approved a new 10 percent tax on alcoholic beverages. But they gave the green light for a 65 percent reduction of electricity bills for residents and farmers in southern desert provinces.
Opposition lawmakers, who represent a small minority in parliament, boycotted the budget vote. Some held up placards in parliament that read: "Starving the people" and "Undermining the social nature of the state".
"The government is blaming citizens for its mistaken policies over the past two decades. It has punished citizens several times," said Lakhdar Benkhellaf of the opposition Justice and Development party.
The government expects energy revenues to reach $35 billion in 2017, up from a projected $26.4 billion this year.
Last week it said it had raised $5 billion from a domestic debt issue, just days after the African Development Bank's approval of a 900 million euro ($1 billion) loan for the North African country.
"The difficult economic situation requires the active contribution of all Algerians to overcome the crisis," said Mohamed Djemai of the National Liberation Front, part of the ruling coalition.
(Reporting by Hamid Ould Ahmed; Editing by Aidan Lewis and Catherine Evans) ((hamid.ouldahmed@thomsonreuters.com;))
* Spending to fall for a second straight year
* Opposition lawmakers boycott budget vote
(Adds details, background)
By Hamid Ould Ahmed
ALGIERS, Nov 22 (Reuters) - Algeria's lower house of parliament on Tuesday endorsed a 2017 budget that includes new taxes on goods and fuel subsidy cuts as part of government efforts to offset a fall in energy revenues.
Next year's budget provides for a 14 percent cut in spending, following a 9 percent reduction in 2016, as the OPEC member remains cautious about any recovery in global oil prices.
Oil and gas account for 94 percent of exports and 60 percent of the state budget. Attempts to diversify the economy have largely failed.
The budget is widely expected to get final approval from the Algerian Senate.
Lower oil prices have hit state finances hard. Authorities have used hydrocarbon revenues to subsidise almost everything from food to fuel and medicine to maintain social stability under President Abdelaziz Bouteflika, in power since 1999.
"There are certainly increases (in taxes) ... but, on the other hand, there are a lot of provisions that are there to improve, boost and enhance economic growth," Finance Minister Hadji Baba Ammi told parliament.
Under the new finance law, prices for unleaded gasoline, premium gasoline and regular gasoline will increase by 13.08 percent, 12.94 percent and 14.11 percent per litre respectively and the diesel price by 7.85 percent.
Earlier this year Algeria began to implement its first fuel price increases in more than a decade, though domestic prices for energy products remain very low by international standards. Diesel is currently 18.23 dinars a litre (16 U.S. cents).
TOBACCO TAX
The new budget provides for a rise in value-added tax (VAT) of 2 percent, while taxes on domestic property rentals will increase by between 7 and 10 percent and tobacco prices by between 60 and 100 percent.
Prices for appliances such as air conditioners and washing machines will go up by between 5 and 60 percent, and the cost of advertising for foreign products by 10 percent.
Lawmakers also approved a new 10 percent tax on alcoholic beverages. But they gave the green light for a 65 percent reduction of electricity bills for residents and farmers in southern desert provinces.
Opposition lawmakers, who represent a small minority in parliament, boycotted the budget vote. Some held up placards in parliament that read: "Starving the people" and "Undermining the social nature of the state".
"The government is blaming citizens for its mistaken policies over the past two decades. It has punished citizens several times," said Lakhdar Benkhellaf of the opposition Justice and Development party.
The government expects energy revenues to reach $35 billion in 2017, up from a projected $26.4 billion this year.
Last week it said it had raised $5 billion from a domestic debt issue, just days after the African Development Bank's approval of a 900 million euro ($1 billion) loan for the North African country.
"The difficult economic situation requires the active contribution of all Algerians to overcome the crisis," said Mohamed Djemai of the National Liberation Front, part of the ruling coalition.
(Reporting by Hamid Ould Ahmed; Editing by Aidan Lewis and Catherine Evans) ((hamid.ouldahmed@thomsonreuters.com;))
