Tunisia presents its new budget and UGTT rejects it, threatening to "occupy the streets"

The gap between the government and the Tunisian population continues to widen as time goes by. Neither the abstention in the referendum on the Constitution unilaterally drafted by President Kais Saied, nor its own abstention in the legislative elections, has served to make the government listen to society. Now, with the announcement of the new budgets for 2023, discontent is once again flooding the Tunisian streets, and the Tunisian trade union centre, UGTT, is talking about mass protests and "occupying the streets" to show their rejection of the budgets announced by the Minister of Finance, Sihem Boughdiri.
 
Tunisia's financial crisis has left inflation above 10% and a budget deficit of 7.7% of gross domestic product (GDP). The aim for next year is to improve on these figures, according to minister Boughdiri, by reducing the deficit by at least 2.5%, leaving it at around 5% of GDP. However, to achieve this, he says, a tax hike is necessary, which has not gone down well with the country's largest trade union. In fact, the tax hike will not be enough and Tunisia is expected to borrow some 23.5 billion dinars - just over seven billion euros.

But that is not the only thing the Tunisian government will have to draw on to make the 2023 budget work. It will also seek foreign financing of around four billion euros and an additional three billion euros from local banks. However, the most controversial way of raising revenue is the aforementioned tax hike, which affects several sectors of the economy, starting with a new tax on real estate assets worth more than three million dinars - almost one million euros -.
 
To this must be added a 20% tax on cash payments of more than five thousand dinars, which is expected to raise significant revenue, as well as the provision of a $1.9 billion bailout loan from the International Monetary Fund. All of this with the aim of achieving GDP growth of 1.8%, and the calculation of a price of 89 dollars per barrel of oil. Despite all this, the minister, in his statement to journalists, assured that next year will be "a very difficult year" and that inflation, at least for the time being, will continue to rise.

All these measures announced by Sihem Boughdiri have been received very negatively in society, particularly within the UGTT, a trade union with more than a million members. Its president, Noureddine Taboubi, has assured that "they will not accept this situation" and that "they will take to the streets to defend their choices and the interests of the people". Taboubi calls Saied's government "a tax-collecting government" and considers that the Finance Law "increases the suffering of Tunisians", pointing also to the increase in taxes for various professions such as lawyers and engineers from 13 to 19%.
 
It should not be forgotten that the announcement of these new budgets comes on the heels of a rise in the price of drinking water - which is expected to continue to rise next year - as well as fuel prices, due in large part to the country's energy crisis. The UGTT is not alone in its strong rejection of the new budget. Tunisian lawyers have issued a communiqué threatening "fiscal disobedience". What Tunisian society has made clear on several occasions is that they are capable of paralysing the economy through strikes, so the government must seek consensus or the gap with the population will be one of no return.