Tunisian President Kaïs Saïed proposed on Thursday 1er June, the introduction of additional taxes targeting the richest to allow the State to do without a loan from the International Monetary Fund (IMF), whose “dictates”.
Mr. Saïed explained while receiving the head of government, Najla Bouden, that the commodity subsidy system currently in place benefits all Tunisians, including the wealthiest, according to a press release from the presidency.
Faced with this situation, he deemed it relevant the idea of “take the excess money from the rich and give it to the poor” using a quote attributed to one of the first caliphs of Islam, Omar Ibn Al-Khattab. “Instead of lifting subsidies in the name of rationalization, it would be possible to introduce additional taxes to those who benefit from them without their needing them”he added, believing that such a mechanism would allow the State not to submit to the “foreign dictates”.
Mr. Saïed had already rejected in April the “dictates” of the IMF which conditions the granting of a loan to Tunisia to economic reforms and the lifting of certain state subsidies.
Financial crisis
He did not specify in his statements on Thursday how any new taxes could be introduced in a country where employees’ taxes are deducted at source but where a large part of Tunisians exercising liberal professions in the private sector do not declare their income to the tax authorities.
Tunisia, indebted to about 80% of its GDP, obtained an agreement in principle from the IMF in mid-October for a new loan of nearly 2 billion dollars (1.85 billion euros) to help it overcome the serious financial crisis it is going through.
But talks are deadlocked due to the country’s lack of firm commitment to implement a reform program to restructure Tunisia’s more than 100 heavily indebted state-owned companies and lift subsidies on certain commodities.
The economic and financial crisis is reflected in particular by chronic shortages of basic food products against a backdrop of strong political tensions since President Saied assumed full powers in July 2021, shaking the democracy born of the first revolt of the spring. Arabic in 2011.