Supporting tax administration and boosting tax revenues

Context

Twelve years after the revolution, Tunisia is struggling with political and economic instability. This includes a high level of public debt. Since 2011, the annual budget deficit has usually been well over five per cent of economic output, and in 2020 it was as high as nine per cent as a result of the coronavirus pandemic.

The reasons for the rising debt are high government spending and the gap between actual and potential tax revenue. It is estimated that the state loses tax revenue amounting to 20 per cent of gross domestic product every year as a result. Shortcomings in state administration and the legal framework prevent effective, socially fair and sustainable financing for public budgets.

Objective

Public financing stakeholders are implementing measures that increase public revenue effectively, sustainably and in a socially fair manner.

Approach

The project is based on an expanded understanding of the fiscal cycle, which includes collecting revenue and justifying it to taxpayers. To do so it operates in four areas of action:

• In terms of personnel and administration, it puts the Ministry of Finance in a position to collect taxes effectively and inclusively. At the same time, IT-supported processes improve analysis and exchange of data in tax administration.
• The project encourages open dialogue between authorities, the civil society and taxpayers on public revenue. Close cooperation with the media supports even dialogue between the authorities and the population in order to inform and raise awareness among taxpayers. This improves understanding of the tax system and attitudes towards paying taxes.

Last update: December 2023