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HomeNewsTunisia: budget deficit widens by 92% at end of November 2020

Tunisia: budget deficit widens by 92% at end of November 2020

Tunisia’s budget deficit has worsened by 92% at end November 2020, compared to the same period of the previous year to 7.1 billion dinars.

The Supplementary Finance Law provides for a deficit of 11.5 billion dinars at the end of 2020.

As evidenced by the provisional results of the execution of the state budget at the end of November 2020, this worsening of the budget deficit is the result of the decline in tax revenues and the continued increase in debt-related expenditure.

Indeed, at the end of November 2020, the State’s own revenues amounted to 26.5 billion dinars, compared to 28.4 billion on the same date a year ago, down 6.7%.

This decline is mainly the result of the drop in tax revenues by 6.4% from 25.6 billion dinars to 24 billion dinars. As for non-tax revenues, they posted a decrease of 10% to 2.45 billion dinars.

Regarding direct taxes, they declined by 3.9% at the end of November to 10.6 billion dinars.

In detail, income tax increased by 1.3% to 8 billion dinars, including 5.2 billion tax on wages (+8%).

Revenue from corporate taxes fell by 18.5% to 2.5 billion dinars due to the sharp decline in taxes on oil companies (-47%) to 455.6 million dinars.

As for indirect taxes, they went down by 8.2% to 13.4 billion dinars. This decline is mainly the result of the regression of customs duties by 8.2% to 1 billion dinars, while total revenue from VAT fell by 9.8% to 6.4 billion dinars.

Consumption taxes also dropped 2% to 2.6 billion dinars.

Beyond the delays in recovery resulting from the health crisis and lockdown, these setbacks are fundamentally explained by the collapse of economic activity, the fall in consumption and foreign trade.

In addition, total state spending at the end of November last year amounted to 29.5 billion dinars, compared to 28.7 billion one year earlier (+2.9%).

Management expenditure fell by 0.2% to 22.3 billion dinars following in particular the sharp decline in expenditure related to interventions and transfers of 36.6%.

On the other hand, salary expenditures increased by 12.8% to reach 17.3 billion dinars representing 77.2% of total state operating expenses.

Similarly, expenditure on debt service increased by 15.7% to 10.6 billion dinars, divided between 7.2 billion dinars for principal repayment (+16.7%) and 3.4 billion dinars for interest (+13.6%).

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