In order to prevent the country from receiving a loan from the International Monetary Fund (IMF), whose “diktats” he rejects, Tunisia’s President Kais Saied advocated the introduction of new taxes targeted at the richest people on Thursday.
According to a news release from the presidency, Mr. Saied stated when he met with Najla Bouden, the head of government, that all Tunisians, even the wealthiest, benefited from the current system of subsidies for essential goods.
In light of this circumstance, he believed the concept of “taking the surplus money from the rich and giving it to the poor” to be appropriate, invoking one of the earliest caliphs of Islam, Omar Ibn Al-Khattab.
“It would be possible to introduce additional taxes for those who benefit from them without needing them, rather than removing subsidies in the name of rationalization,” he continued, adding that such a mechanism would allow the State to resist “foreign diktats.”
Mr. Saied had already rejected the “diktats” of the IMF in April, which put restrictions on Tunisia’s ability to borrow money by requiring it to implement economic reforms and end several forms of state aid.
In his remarks on Thursday, he made no mention of the potential introduction of any new taxes in a nation where employee taxes are withheld at source, but where a sizable fraction of Tunisians employed in the private sector fail to report their income to the tax authorities.
In order to assist it get through the severe financial crisis it is currently suffering, Tunisia, which is indebted to the IMF to the tune of around 80% of its GDP, received an agreement in principle for a new loan of almost $2 billion in mid-October.
The lack of a solid commitment from the nation to carry out a reform programme to restructure Tunisia’s more than 100 public firms, which are deeply indebted, and to eliminate subsidies on some basic products, has, however, put an end to discussions.
Chronic shortages of basic consumables are a result of the economic and financial crises, which is exacerbated by the high political tensions that have existed since President Saied assumed complete control in July 2021, shattering the democracy that resulted from the first Arab Spring movement.
