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Tunisia

Promoting Financial and Fiscal Transparency (TN0028)

Overview

At-a-Glance

Action Plan: Tunisia Second National Action Plan 2016-2018

Action Plan Cycle: 2016

Status: Inactive

Institutions

Lead Institution: Ministry of finance

Support Institution(s): NA

Policy Areas

Fiscal Openness, Publication of Budget/Fiscal Information

IRM Review

IRM Report: Tunisia End-of-Term Report 2016-2018, Tunisia Mid-Term Report 2016-2018

Starred: No

Early Results: Did Not Change

Design i

Verifiable: No

Relevant to OGP Values: Access to Information

Potential Impact:

Implementation i

Completion:

Description

Promoting financial and fiscal transparency

IRM Midterm Status Summary

8. Promote financial and fiscal transparency

Commitment Text:

This commitment tends to devote the principle of fiscal justice and encourage the tax payers to respect their fiscal duties. It also aims at the increase of the state budget resources through better exploitation of the tax energy, especially by reducing tax expenditures.

Responsible institution: Ministry of finance

Supporting institution(s): None

Start date: August 2016     End date: July 2018

Context and Objectives

Since the revolution of 2011, Tunisia has been trying to reform its fiscal and opaque taxation system. The country’s fiscal deficit is high at 5.9 percent of GDP in 2017. [31] The tax system is perceived to be unfair, favoring businessmen that benefit from fiscal advantages, and independent workers like doctors, lawyers, architects and consultants. [32] Reforms to expand the fiscal base faced tremendous pushbacks; in 2016 the lawyers went on strike to protest the finance bill draft that put more pressure on them to pay their taxes. [33] The UGTT, the powerful labor union of Tunisia, criticized the governments that followed the revolution for putting pressure on good payers instead of making bad payers pay. [34] The International Monetary Fund (IMF), the main lender, is pressuring the government to reduce public expenditures and expand the taxation base. The IMF insists, however, that without fiscal transparency, reforms will be much harder to achieve. [35], [36]

The objective of this commitment is to produce two annual reports. The first would be on tax benefits and advantages provided by the state to state and private bodies, however, the commitment text does not specify which years this report would cover.

The second report concerns fiscal obedience, which would disclose information about the amount of collected taxes and the sources from which these taxes were generated. However, the commitment does not provide additional information on how these reports would be developed and in which format they would be presented.

The commitment is relevant to the OGP value of access to information as it will disclose important data on fiscal obedience and state-generated income. CSOs from the OGP Steering Committee in Tunisia view this commitment to be important. However, since the commitment is not specific about how this data will be disclosed, or whether this data would be public or not, and what type of details will be provided, it is not clear if it will allow meaningful analysis on how state income is generated and which companies receive tax advantages. Therefore, the potential impact of this commitment, as written, will be moderate.

Completion

The progress on this commitment is limited. The commitment had no focal point for several months and the project coordinator has changed three times in a year. The first designated person, Aicha Karrafi, General Director at the Ministry of Finance, was in the process of retiring during the assessment and had to transfer the responsibility of the commitment to another responsible person within the ministry. The IRM researcher’s interview with Mrs Karrafi talked about the complexity of the production of the two reports. The Ministry of Finance has faced challenges in publishing consolidated actuals for the state’s budget closing of 2013 and 2014, and 2015 [37] was still pending at the time of writing this report.

Watchdog groups, such as I-Watch, Al-Bawsala and Article 19, have expressed concerns about the lack of communication on the progress of this commitment.

Next Steps

This is an important commitment and if not completed under the current action plan, it should be carried forward to the next one. For implementation to advance, the Ministry of Finance needs to specify what information would be published in the reports, which fiscal years would be covered and whether the report is going to be produced by the Ministry of Finance or the Auditor General’s Office. The IRM researcher recommends the following:

  • Specify the deliverables of the commitment in more detail
  • Publish the report in exploitable open data format
  • Organize an open public debate to discuss the budget details with CSOs before publication of the final report
[36] IMF, Tunisia Fiscal Transparency Evaluation, https://www.imf.org/external/pubs/ft/scr/2016/cr16339.pdf

IRM End of Term Status Summary

8. Promoting financial and fiscal transparency

Commitment Text:

This commitment tends to devote the principle of fiscal justice and encourage the tax payers to respect their fiscal duties. It also aims at the increase of the state budget resources through better exploitation of the tax energy, especially by reducing tax expenditures.

Milestones:

The fulfillment of this commitment requires the publication of two reports:

  • An annual report on tax expenditures accompanying the annual budget presented to the parliament,
  • An annual report on fiscal obedience.

Responsible institution: Ministry of finance

Start date: August 2016 End date: July 2018

Editorial Note: This is an abbreviated version of the commitment text. For the full commitment text from the Tunisia National Action Plan, see here.

Commitment Aim:

This commitment aimed to increase financial and fiscal transparency through the production of two annual reports. The first report includes information about tax benefits and breaks provided by the state to public and private entities. The second concerns fiscal obedience, which would disclose information on the amount of taxes collected and the sources from which these taxes were generated.

Status

Midterm: Limited

The completion of this commitment was limited during the midterm assessment. The commitment focal point changed during the implementation phase. Since then, neither the OGP focal point in the government nor the IRM researcher were able to find substantial information verifying the implementation of the commitment. The current OGP government point of contact acknowledges that “some work is being undertaken” to implement this commitment but the IRM researcher could not verify this.

End of term: Limited

The status of the implementation of this commitment did not change by the end of term. Despite multiple attempts through different channels, no additional information was available neither to the NGOs represented in the OGP steering committee nor to the IRM researcher. The government self-assessment report also records the completion of this commitment as limited. [45]

Did It Open Government?

Access to Information: Did Not Change

While the publication of two reports could have had a major impact in improving the openness of the government, the limited completion of this commitment did not change government practice.

Carried Forward?

This commitment was not carried forward.

[45] Government self-assessment report 2016-18 action plan http://www.ogptunisie.gov.tn/en/?p=1154

Commitments

Open Government Partnership