Slim Chaker, Minister of Finance: Interview

Interview: Slim Chaker

What are the priorities in terms of fiscal reform?

SLIM CHAKER: The Tunisian government is looking to establish a fair taxation framework that supports the country’s economic development. To this end, the government is working on reducing certain taxes, broadening the tax base and making the system more coherent. The most important measure in the fiscal reform is a relief in personal income tax: the first tax bracket, for incomes between TD0 and TD5000 (€2293), has been entirely exempted, while the other tax brackets, have underwent a review, and new tax rates were introduced as a result. The second priority is the reform of corporate taxes. Indeed, in 2015, for the first time in Tunisia, completely export-oriented companies have started to pay a 10% tax, which is the benchmark for export companies in the region. A third important measure concerns fiscal administration, with the introduction of a new information system that will facilitate communication between the numerous ministries and departments and increase efficiency. The new information system will perform risk analyses in order to identify non-compliant payers or suspicious tax returns. By using digital information, the new system will also minimise the problems of possible corruption and poor governance.

Moreover, companies that meet certain criteria will now enjoy a special status known as Authorised Economic Operators, which will entitle them to manage their own tax returns and be subject to a posteriori controls. Another important measure will be the modernisation of Customs procedures, a crucial step in reducing the informal sector, which today represents around 50% of the Tunisian economy. These procedures will undergo a considerable modernisation with the introduction of a number of new measures, including the digitisation of information, the addition of a posteriori controls and an electronic payment system. In addition, Customs taxes will be simplified, with a 0% taxation rate for capital goods and a 20% tax rate for the rest.

Which fiscal tools are being used to improve the purchasing power of Tunisians?

CHAKER: An increase in purchasing power is being accomplished through a reduction of Customs and consumption taxes but also by an increase in salaries. The government has signed an agreement with the Tunisian General Labour Union in order to increase salaries over the next three years with a view to guarding the middle class against inflation. In addition to that, the government and the Central Bank of Tunisia are committed to maintaining prices and keeping inflation under control.

How would you assess the main challenges in complying with international lenders?

CHAKER: Tunisia is moving forward with the major reforms the country needs to boost economic development, as required by international donors. Major reform measures have already been implemented, including the recapitalisation of public banks, the modernisation of Customs procedures, and new laws in the areas of public-private partnerships, competition, bankruptcy and tax. With these moves, the country is sending strong signals to the international community to show that Tunisia is not only taking advantage of the credit line they have offered but also that we respect the external advice and expertise of the international donors.

Tunisia needs support from the international community to strengthen its national budget. Indeed, three years will be required to implement the necessary reforms and to see them begin to have an impact. During that time public revenues will not be enough to fully meet national expenses. Secondly, we also need investment as soon as possible, in order to create the 600,000 jobs that the economy needs.