Tunisian parliament approves budget without new taxes

BERLIN, GERMANY - FEBRUARY 14: Tunisian Prime Minister Youssef Chahed and German Chancellor Angela Merkel (not pictured) arrive to lay flowers at a memorial to the December Berlin terror attack on February 14, 2017 in Berlin, Germany. Earlier in the day the two leaders discussed the acceptance by Tunisia of Tunisians in Germany up for deportation due to failed asylum applications. The issue has become sensitive in light of the December terror attack in Berlin by Tunisian national Anis Amri, whose deportation was pending but had been delayed due to the slow response by Tunisian authorities. (Photo by Sean Gallup/Getty Images)

Tunisia’s parliament on Monday approved a 2019 budget imposing no new taxes on individuals and easing the burden on some sectors after years of tax hikes that have stoked public anger and at times violent protests.

The budget, adopted by 113 votes out of 217, projected a fall in the deficit falling to 3.9 percent of gross domestic product in 2019, from about 5 percent expected this year.

Prime Minister Youssef Chahed said earlier this year that 2018 would be the last difficult year for Tunisians, but his government remains under pressure from the International Monetary Fund to trim the budget deficit by cutting subsidies and reforming the bloated public sector.

Next year budget expects Tunisia’s economy growing in 2019 by 3.1 percent, up from an estimated 2.6 percent this year.

The government will halve tax for companies operating in sectors including technology, textiles, engineering and pharmaceuticals to 13.5 percent under next year’s budget.

The 2018 budget raised taxes on cars, alcohol, telephone calls, the internet, hotel accommodation and other items in an effort to help balance the books.

Taxes on bank profits were raised to 40 percent from 35 percent. The government also raised this year by 1 percentage point the value-added tax and imposed a new 1 percent social security tax on employees and companies.