Economy Higher tax income cuts Tunisia’s 2024 budget deficit By Nadim Kawach February 20, 2025, 3:10 PM Reuters/Jihed Abidellaoui Tunisia's prime minister Kamel Madouri speaking in its parliament. The country has managed to reduce its 2024 budget deficit Deficit cut by $1bn Stands at $3bn Revenues up 10% Higher than anticipated tax income helped Tunisia bring down its budget deficit last year. The ministry said last weekend that the deficit declined despite a 5 percent rise in actual spending and was funded through borrowing, Ultra Tunisia reported. Last year’s budget deficit stood at 10 billion Tunisia dinars ($3 billion), down from 11 billion dinars ($4 billion) in 2023. The 2024 shortfall accounted for 6 percent of GDP, the finance ministry said in a report, which attributed the lower deficit to higher revenues. The paper showed total revenues swelled by 9 percent to 47 billion dinars in 2024 following a 10 percent growth in tax earnings to 42 billion dinars. Tunisia drafts plan to merge FDI agencies into one Record tourism numbers expected in Tunisia Tunisia turns to waste to tackle power supply gap Expenditure increased by 5 percent to 56 billion dinars mainly because of a rise in debt financing due to higher interest rates, the report said. It added that there was an increase in debt financing last year after interest on the debt grew by 8 percent to 6 billion dinars. The document showed foreign debt servicing surged by a fifth to 25 billion dinars at the end of 2024 while overall domestic and foreign debt hit 135 billion dinars or 81 percent of GDP. In a report in late 2024, the World Bank said Tunisia has managed to contain its current account deficit. However, it is increasingly turning to financing sources, with domestic debt rising from 30 percent of total public debt in 2019 to 52 percent by August 2024, the Bank added. “This development turns a growing share of banks’ funding to government needs and away from the rest of the economy. It also presents risks for the currency and price stability,” the World Bank said in its November report. The report emphasised the importance of “achieving more balance between labour and capital taxation to foster a more equitable approach.” “The current heavy tax responsibility on labour – including large social security contributions even for low-income earners – may encourage informality, discourage hiring and reduce wages,” the Bank said.
