Tunisia-OXFAM :Tunisian tax system favours most unfair forms of taxation

The Tunisian tax system favours the unfairest forms of taxation, penalises the country’s middle and lower classes, in addition to depriving the state of significant income, this is the finding made by the report published Wednesday by the anti-poverty organization “Oxfam” Tunisia.

The 46-page report highlights the contribution of the Tunisian tax system to the deepening of inequalities among Tunisians. It draws attention to the risk of these inequalities becoming even more pronounced with the coronavirus.

He recalls that in 2017, the richest 10% held more than 40% of the national income, compared to only 18% for the poorest half of the population, stating that “not all citizens have the same status and are not all equal with regard to taxation”.

In particular, Oxfam points out the discrepancies in this area between employees and self-employed workers who are subject to the flat-rate scheme and whose contribution yields on average 0.2% of tax revenues.

It also states that “income from capital” is also taxed less than income from labour and is taxed at a proportional rate of 10%”.

The report also dwells on the deterioration of public services, noting that “under the impetus of austerity policies encouraged by the International Monetary Fund (IMF), the shares of education and health expenditure in the state budget fell sharply between 2011 and 2019, from 26.6% to 17.7% for education and from 6.6% to 5% for health respectively”.

For Oxfam, the pandemic, which has exposed the fragility of the public health system, is an opportunity for the government to carry out an ambitious reform of the tax system in order to meet its obligation of fiscal justice.

It also notes that “the gaps in terms of education, health, poverty, infrastructure and access to employment are widening between coastal regions, where skills and economic opportunities are concentrated, and inland regions with low levels of industrialisation and cumulative difficulties”.

The report proposes recommendations for initiating a real dialogue on the issue and introducing in-depth reforms to the Tunisian tax system.

Source: (TAP)