15 July 2014

Tunisia Debates Budget Bill

E Najjar in Tunis — Tunisia's proposed complementary finance law (LFC) includes many new taxes, causing widespread controversy.

The bill, published on July 8th, proposes a levy of one to six days' worth of the employees' wages depending on their salary brackets, according to BusinessNews.com.

A 30 dinar per night supplementary tax on hotel stays for foreign visitors would also be put in place under the new law. This duty was previously set at two dinars, so such measures could provide an additional 75 million dinars (32.22 million euros) in revenue for the state.

Under the LFC, an increase in taxes would also be assessed on mobile phone usage, charge card services, alcoholic beverages and the importation of vehicles. Duties would also be collected from citizens for getting married or using courts.

Meanwhile, the government will seek to wrap up audits that are still being reviewed. This move will provide 160 million dinars (68.74 million euros).

The bill, currently under review by the National Constituent Assembly (ANC), has come under scrutiny.

This draft "burdens middle classes and gives capitalists more tax breaks", Popular Progressive Party chief Hichem Hosni said.

According to Ennahda deputy Mounir Ben Hania, "The ministry wants to pass the same chapters and measures that were rejected in the complementary budget last year and in the 2014 finance law."

Economists also raised questions about the budget bill.

Financial risk expert Mourad El Hattab told Magharebia: "This supplementary budget can't realise any economic growth given the size of debts inherited from the troika government and in view of the deteriorating economic indicators, such as lack of liquidity, worsening trade deficit and deterioration of the tourism season this year."

"These measures are very painful, but Tunisians will find out about their impact on their lives only after the summer," he said.

"Some measures will spark controversy although they will only have a minimal impact, such as the revenue stamps imposed on marriage contracts," El Hattab added.

In his turn, economic expert Fethi Chamkhi said: "Most measures target poor and popular categories. This law is dangerous to middle-income citizens' purchasing power."

Tunisian citizens had mixed feelings about the draft law.

"Although the measures and taxes included in the 2014 supplementary budget law are more painful for Tunisians, they didn't lead to popular protests like those that took place at the end of 2013 when the 2014 finance law was presented," 54-year-old Mustapha Zoghbani said.

"The fact that the government chose to present this law in the summer and during Ramadan might have been the reason that it hasn't sparked popular outrage in the street," he noted.

But Amna Maroueni, 34, suggested that the measures were "necessary to rescue the deteriorating Tunisian economy".

"Tunisian citizens must be partners in rescuing their country's economy and be aware of the dangerous stage we're living in," she said.

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