Tunisia’s budget deficit increased almost threefold in 2020. This is what emerges from the provisional results of the execution of the state budget at the end of last December published by the Ministry of Finance.
In fact, the budget deficit worsened by 185% to 11.6 billion dinars, compared to 4 billion in 2019.
The Supplementary Finance Law projected a deficit of around 13 billion dinars at the end of 2020. This worsening results from the decline in tax revenues and the continued increase in debt-related expenditures.
Thus, the state’s own revenues would be 30.6 billion dinars in 2020, compared to 32.4 billion a year ago, a decline of 5.3%.
This decline is mainly due to the decline in tax revenues by 6.1% to 27.1 billion dinars, while non-tax revenues virtually stagnated to 3.5 billion dinars.
The decline in tax revenues is due to the fact that the state has been able to increase its tax revenues by 1.5% to 27.1 billion dinars.
As for the resources of borrowing and cash, they were multiplied almost by two from 9.9 billion dinars in 2019 to 18.2 billion last year including 15.9 billion of borrowing resources.
Direct taxes, on their part, fell by 4.6% in 2020 to 12 billion dinars. In detail, the income tax increased by 1.5% to 8.9 billion dinars, including 5.8 billion taxes on wages (+6%).
For revenues from corporate taxes, they went down by 18.6% to 3.1 billion dinars due to the sharp decline in taxes on oil companies (-55%) to 509.6 million dinars.
As for indirect taxes, they dropped 7.2% to 15 billion dinars. This decline is mainly due to the 7.6% decrease in revenue from VAT to 7.2 billion dinars and the regression of customs duties by 4.4% to 1.2 billion dinars. Consumption rights, meanwhile, fell slightly by 0.6% to 2.9 billion dinars.
Besides, management expenses increased by 13.4% in 2020 to 29.9 billion dinars following, in particular, the strong growth of expenditure on salaries, which show a 14.5% increase to 19.2 billion dinars.
Similarly, spending on public debt service went up by 15.9% to 11.1 billion dinars divided between 7.4 billion under the repayment of the principal (+15.6%) and 3.7 billion under the interest (+16.6%).
The outstanding public debt thus reached 92.8 billion dinars at the end of December 2020 against 83.3 billion a year earlier, representing 83.5% of Tunisia’s GDP.
This outstanding debt is divided between 31.6 billion dinars domestic debt and 61.2 billion in external debt.