Tax incentives as a strategic lever for supporting startups and advancing the transition toward a green economy in Algeria

Abstract

This paper examines the role of tax incentives as a strategic policy lever for supporting startup ecosystems and advancing Algeria's transition toward a green economy. Drawing on international experiences from emerging and developed economies, the study analyzes the theoretical foundations, design considerations, and implementation mechanisms of fiscal instruments targeting green entrepreneurship. The analysis reveals that while Algeria has established a nascent startup legal framework and identified green economy priorities, significant gaps persist in the coherence, targeting, and effectiveness of tax incentives. The paper proposes a sequenced reform agenda comprising short-term administrative simplifications and medium-term structural frameworks aligned with sectoral green priorities. Comparative case studies from Egypt, Jordan, Kenya, and Tunisia illustrate design choices relevant to the Algerian context. The findings emphasize that tax incentives alone are insufficient without complementary institutional coordination, monitoring frameworks, and integration with financial ecosystem actors. The study contributes to policy debates on fiscal innovation for sustainable development in resource-dependent economies transitioning toward economic diversification.