Tunisia will impose no new taxes on individuals and firms under the 2019 budget but will continue to reform a costly subsidies system, Prime Minister Youssef Chahed said on Friday.
The country has struggled to fulfil donors’ demands to reform its economy and cut its budget deficit amid turmoil since the ousting of president Zine El-Abidine Ben Ali in 2011.
Unwilling to cut a bloated public service due to resistance from labour unions, the government has raised taxes several times, prompting riots for weeks in January.
The cost of fuel subsidies this year will rise from an expected 1.5 billion dinars($542 million) to 4.3 billion dinars due to the rise in world oil prices, officials have said.
The IMF has been pressing Tunisia to trim its budget deficit and increase fuel and electricity bills.
Chahed, who is fighting for survival as some in his Nidaa Tounes party and labour unions have tried to oust him, vowed to go ahead with unpopular decisions.
“Despite … the lack of political support for the government we will go ahead next year with reforms including welfare contributions and subsidies,” he said, without giving details.
The IMF and Tunisia reached an initial, or “staff level”, an agreement last month on the next reforms, the IMF has said.
The Washington-based fund is due to decide whether to pay out the next loan instalment worth $250 million, part of a $2.8 billion scheme, at a board meeting this month.