Tunisian-French Chamber of Commerce and Industry's 2024 Barometer: Impact of Tax Pressure on Businesses
The Tunisian-French Chamber of Commerce and Industry's 2024 Barometer, which includes forecasts for 2025, was presented on Thursday, January 30. The report provides an analysis of the impact of economic conjuncture on the performance of Tunisian-French businesses, with a focus on the impact of taxation.
Tax Pressure in Tunisia: A Barrier to Growth?
The question on everyone's mind is: what would be the impact of reducing tax pressure? Would it truly lead to growth? Mohamed Louzir, Secretary General of the Chamber, provided an answer. He emphasized that neither the CCITF nor the State has modeled the impact of tax pressure on businesses, but the Chamber has insights inspired by its members.
Louzir added that business leaders were apprehensive when the 2025 Finance Law was introduced, which increased the maximum tax rate from 35% to 40%. The Ministry of Finance published statistics highlighting the difference between various tax brackets, ranging from 15% to 40%. However, Louzir expressed doubts about the accuracy of these statistics.
The Consequences of Excessive Taxation
According to Louzir, "too much tax kills tax." In Tunisia, we have reached the point of "too much tax." When taxes are increased, revenue initially increases, but eventually reaches a plateau and then declines. What's concerning in Tunisia today, Louzir noted, is that we are on the downward curve, experiencing a decline in tax revenue.
To illustrate his point, Louzir explained that when taxes rise, people are encouraged to operate in the informal sector and evade taxes. On the other hand, when taxes are lowered, although the government may receive less revenue from banks, it can regularize informal activities and increase revenue.
In summary, the Tunisian-French Chamber of Commerce and Industry's 2024 Barometer highlights the need to reassess the impact of tax pressure on businesses and consider the potential benefits of reducing taxation to stimulate growth.
