- If a country like Tunisia has any hope of flourishing and attaining the great height that was envisioned by its ancestors, the public purse must have much more income compared to its deficit.
Taxes in Tunisia Goes up to Cover the 2023 Deficit as a saving strategy for a country that has accumulated a huge debt as a result of borrowing from foreign entities, overspending, misappropriation, and failure to generate enough tax revenue among other reasons.
It is on this premise that Tunisia has resorted to raising tax revenue as this is one of the most efficient ways of funding the public purse without having to borrow.
This scenario is exactly what the Tunisian 2023 budget recently unveiled by Tunisian Finance Minister, Sihem Boughdiri, during a press conference in Tunis on December 26, 2022, is all about.
According to Boughdiri, the new budget aims to use new tax revenues to cut the budget deficit from 7.7% of the gross domestic product to 5.2%.
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Taxes in Tunisia Goes up to Cover 2023 Deficit: More on the Budget
The government is planning to get up to 46.4 billion dinars ($14.8 billion).
In recent times, the country has been battling a huge public debt that is made worse by a 10% inflation which might eventually rise to become 1.5% if care is not taken.
The government is however hoping to realize some relief through this latest plan while it awaits help from international entities.
The budget is based on assumptions of 1.8% GDP growth, oil at $89 a barrel, and a contract with the International Monetary Fund for a $1.9 billion bailout loan.
The Finance Minister mentioned that a loan of around 23.5 billion dinars will be needed to take care of the state’s needs for the subsequent year.
How the new tax plan will work
To generate additional revenues, to help turn the country’s financial situation around, the government has imposed a new tax of half a percent on real estate assets that are valued at over three million dinars ($960,000).
Also, according to the government, cash payments of over 5,000 dinars will be charged a tax rate of 20% while taxes on certain professional services such as legal services will be increased from the current 13% to 19%.
At the end of the day, the Tunisian government is striving and looking for every possible means to resolve this debt issue so the North African country can go back to functioning optimally.
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