The only survivor of all the cabinet reshuffles is up to her usual secretive tricks. As she does every year, Finance Minister Sihem Nemsia is preparing the budget and the finance law that will govern the lives of almost 12 million Tunisians, with only the head of state and the head of her government as privileged witnesses.
– And then there is the Saïed-style development plan.
We don’t know whether he is acting as the outgoing president or as a candidate for his own succession in a scrubbed seat, but the latest statement from his last meeting with Kamel Madouri, on the subject of the FB (Finance Bill) 2025, reads ‘The President of the Republic of Tunisia, Kais Saïed, has recommended that the FB 2025 be premised not only on the achievement of financial equilibrium based on the country’s national choices, but also on the achievement of social justice’. This is the prologue to a new economic era in Tunisia.
An era in which the pattern of development will be that of a modern Robin Hood, of verbal incontinence and populist handouts, in which we take from the rich to give to the rest of those who live off the black economy and are unwilling to change their way of life, to those whom he hopes will one day replace the rich, whom he blames for all the ills.
Budget funds in a budget short of cash!
Before Madouri, Saïed asked for the revision of a number of customs duties, without specifying which ones and for what reason, other than to get more money for his project. Perhaps to finance this “special insurance fund for the loss of jobs and another for the social protection of female workers in the agricultural sector”.
Saïed, we don’t know which year, also wants ‘a project to create funding lines for people with special needs to launch projects that guarantee their full integration into society’.
For him, “justice and equity require that everyone contributes, within the framework of a transparent and fair tax system based on progressive taxation, the effectiveness of which has been proven by numerous comparative experiments”.
Taxation is not a problem. The Finance Ministry is reaping the rewards in spades, and more and more than the previous Finance Act anticipated. In 2022, tax revenues will be 16.6% higher than forecast.
In 2023, they were 7.3% higher than forecast. The 2024 Finance Act had already forecast an increase of 11.6%, and by the end of June 2024 tax revenues were already 10.3% higher than forecast.
Formerly a specialist in tax legislation, the minister has no qualms about introducing new taxes whenever the need arises. Always anticipating the boss’s wishes, she has taxed banks and large private companies on several occasions, as evidenced by the recent 8% tax on bank profits.
The ABC of taxation is that taxes affect purchasing power!
Before the Prime Minister, the Finance Minister presented a package of financial and tax measures adopted in the Finance Bill for 2025, which, according to the press release, are aimed at “strengthening the purchasing power of citizens”. However, Sihem Nemsia did not ask herself how more taxes could increase the purchasing power of Tunisians. As she had done under Najla Bouden’s government, she did not try to explain the devastating effect of a customs review on local prices and the purchasing power of citizens, whose only concern was the timing of tax payments.
The same goes for the impact of the president’s call for progressive taxation for all individuals and companies with an income. The higher the income,” says Kais Saïed, “the higher the tax. That may be tax justice. But the more income is taxed, the more prices rise to compensate for the loss of purchasing power, and the more prices rise, as if through the effect of higher tariffs, the more inflation rises.
More tariffs on photovoltaics to boost investment?
And it was perhaps Kamel Madouri who remembered this and pointed out to the Finance Minister, who is turning a deaf ear to the real concerns of those for whom she is drafting the Finance Law 2025, “the importance of consistency between the financial and fiscal measures included in the Finance Law 2025 and the state’s vision and orientations. These are essentially based on guaranteeing tax fairness, improving purchasing power and encouraging investment, while continuing to support the foundations of the social state.
Did Saïed, the anti-sub-contracting, know that there was a specialized public company?
Perhaps Kamel Madouri, former CEO of the CNAM, a beneficiary of billions of TND, and CEO of the CNRPS, could have explained to his boss that pension funds are a structurally loss-making business model, as is the ‘fund for the social protection of female agricultural workers and the issue of subcontracting’, as requested by Kais Saïed.
He should also be told that the Tunisian state itself has a company called ‘Itisalia’ that specializes in sub-contracting, so it needs to put its own house in order first.
The FB 2025, which is due to be presented to the ARP in less than 15 days, is in theory the translation of a budget into concrete measures. Like the FB, the 2025 budget is an unknown quantity, without any guidelines known to the people who will be its ‘victims’, and without telling these people, who do not want such a procedure for the preparation of the budget and the related FB, what sauce they are going to be eaten with.
And without a real development plan, drawn up by ministers who, like their predecessors as ministers, are dismissed as soon as they mention it, the 2025 budget will remain a document without color, smell or taste.
Its FB, which only the Minister of Finance knows and about which she does not even speak in front of her boss, Kamel Madouri, seems to be, in the humble opinion of ordinary citizens new to taxation and economic development, just a collection of measures whose only aim is to make more money, and certainly not to improve the purchasing power of Tunisian citizens.
