Cash-strapped Tunisia may tax private firms to fund virus fight

Tunisia may impose exceptional taxes on companies if the government does not find the funds needed during the coronavirus crisis, Prime Minister Elyes Fakhfakh said on Thursday, a move that might open a clash with the private sector.

Fakhfakh said Tunisia needs more than $1bn in domestic and foreign funds and will ask major companies in the country to assist the government’s efforts.

Tunisia, which has been in economic hardship since the 2011 revolution and has poor health infrastructure, began collecting donations from companies and individuals to tackle social and economic affects of the coronavirus outbreak.

The amount of donations announced by the companies so far is about $50m, but the government believes more is needed.

“Some companies have money and have not helped enough to support state efforts … if we do not reach what we need, we may have to take decisions unilaterally,” Fakhfakh said in an interview with state TV.

“We could impose exceptional taxes … We hope that we will not get to that,” he added.

Tunisia expects to obtain a loan of more than $400m from the International Monetary Fund to help fight the pandemic. But the prime minister said that Tunisia should depend on the efforts of its people because the country’s international partners have enough problems of their own now.

The UTICA union, a syndicate of firms, said it regretted its scepticism about the role of companies and made an appeal for national unity. “We strongly condemn politicians who are asking for money in illegal ways,” it said in a statement.

Tunisia extended a lockdown which started on March 20 by two weeks to April 19, preventing people from leaving their homes except to buy necessities or to work in certain jobs.

Tunisia has 455 confirmed cases of COVID-19 and the disease has claimed least 14 lives in the country.

Containment measures – both domestic and international – are crushing Tunisia’s vital tourism sector, which represents nearly 10 percent of its gross domestic product. The country cut its growth forecast for this year to 1 percent from 2.7 percent.