VenturesNow

Tunisia considering raising tax on upper class amid delay in IMF loan

Published

2 years ago

June 2, 2023

Tunisia appears to have found a way around its revenue challenge with plans to raise taxes targeting the upper class in its society.

President Kais Saied on Thursday announced that additional taxes would be introduced as a stopgap measure ahead of an expected loan from the International Monetary Fund (IMF), whose “diktats” he rejects.

According to a press release from the presidency, President Saied maintained that the system of subsidies for basic products currently in place in the country benefitted everyone, including the wealthiest.

He revealed that the country was considering the idea of “taking the surplus money from the rich and giving it to the poor” to be relevant in its current situation.

“Instead of lifting subsidies in the name of rationalisation, it would be possible to introduce additional taxes for those who benefit from them without needing them”, he added.

Tunisia’s General Labour Union (UGTT), a few months ago, raised concerns over the proposed financial bailout by the IMF for the country. Labour officials during the May Day celebration criticised what they described as “an IMF government” as protesters chanted “No to colonization.”

Tunisia, which is indebted to the tune of roughly 80% of its GDP, received an agreement in principle from the IMF last year for a new loan of nearly $2 billion to assist it in overcoming its severe financial crisis.

However, discussions have come to a halt due to the country’s lack of a firm commitment to implement a reform programme to restructure Tunisia’s more than 100 public companies, which are heavily in debt, and to lift subsidies on certain basic products.

Italy has raised concerns over IMF’s decision to block a $1.9 billion loan to Tunisia amid fears it might lead to a new wave of migrants towards Europe.

VenturesNow

IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

24 hours ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

VenturesNow

Libya’s eastern govt accepts petrol subsidy elimination

Published

1 day ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.