The Financial Express

Tunisia's parliament approves $14.55b budget for 2018

| Updated: December 12, 2017 14:17:53

File Photo (Collected) File Photo (Collected)

Tunisia’s parliament has approved a 36 billion dinar ($14.55 billion) budget for next year which included a package of fiscal measures to cut the budget deficit.

The budget for the fiscal year that starts on Jan. 1 was passed on Saturday in the parliament with 134 votes out of 217 lawmakers, reports Reuters.

It forecasts the budget deficit to fall to 4.9 per cent of gross domestic product in 2018, from about 6.0 per cent expected in 2017.

Tunisia aims to raise GDP growth to about 3.0 per cent next year from 2.3 per cent this year.

Tunisia is under pressure from the International Monetary Fund to speed up policy changes and help its economy recover from militant attacks in 2015 that hurt its vital tourism industry.

The 2018 budget raises taxes on cars, alcohol, phone calls, the internet, hotel accommodation and other items.

It raises customs taxes on some products imported from abroad, such as cosmetics, and some agricultural products to cut the trade deficit which widened by 23.5 per cent year-on-year in the first 10 months of 2017 to 13.210 billion dinars, a record.

The parliament approved a rise of 1.0 percentage point in value-added tax and imposed a new 1.0 per cent social security tax on employees and companies.

State social security funds suffer from a deficit of about $1 billion as the economy has been in turmoil since the 2011 uprising against autocrat Zine El-Abidine Ben Ali, according to officials.

Taxes on bank profits will rise to 40 per cent from 35 per cent.

In April, the IMF agreed to release a delayed $320 million tranche of a $2.8 billion loan package, on condition that Tunisia raise tax revenue, reduce the public wage bill and cut popular energy subsidies.

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