Tunisian Economy Observatory Considers Rejection of Wealth Tax Article a Step Backwards
The Tunisian Economy Observatory (OTE) believes that the rejection of Article 50 of the 2026 Finance Bill, related to the wealth tax, by the Finance and Budget Committee of the People's Representatives Assembly (ARP) is a step backwards on the path to fiscal justice.
Background
In a bulletin published on Monday, the observatory recalled that Article 50 of the 2026 Finance Bill aimed to expand the scope of the wealth tax. It proposed to extend the base of the real estate wealth tax, initially adopted in the 2023 Finance Law. Currently, this tax only applies to real estate assets with a real commercial value of 3 million dinars (MD) or more, at a rate of 0.5%, and excludes the primary residence and professional assets.
The rejected text aimed to expand the scope of this measure to include real estate assets, commercial assets, and acquired movable assets. It also introduced increased progressivity by creating two brackets based on the value of the assets: 0.5% for assets with a value between 3 MD and 5 MD, and 1% for those exceeding 5 MD.
Need for Equitable Distribution of Wealth
The rejection of this article comes as the Tunisian Economy Observatory and the Ali Ben Ghedhahem Center for Fiscal Justice had previously called for strengthening the progressivity of this tax to achieve effective revenue and balance the distribution of wealth. The two organizations criticized the strong concentration of wealth: 10% of Tunisia's richest citizens hold 58% of the total wealth, and 1% of them own 24.1%, while 50% of citizens own only 4.9%.
In the face of this uneven concentration, the Observatory emphasizes that the adoption of a progressive wealth tax is essential for fair redistribution, reducing social disparities, and creating a financial margin to fund social sectors.
However, it estimates that the real progressivity of income tax in Tunisia remains insufficient. A 2024 World Bank report highlights that Tunisia has the largest gap between tax rates on labor income and those on capital income among developing countries. This disparity contributes to the deepening of wealth concentration, allowing high-income categories to convert their resources into lightly taxed capital gains, thus shifting the tax burden mainly to the salaries of the middle class.
Potential Benefits of Wealth Tax
The Observatory considers that, contrary to the widespread idea that the wealth tax could discourage investment, this tax could, on the contrary, encourage the wealthiest individuals to redirect their assets towards more profitable and productive investments. By targeting productive and non-productive assets, the tax encourages investment in high-yielding assets rather than the conservation of inert or low-yielding assets.
According to the OTE, in the face of the persistent budget deficit and the lack of resources to fund key social sectors (health, education, transport), and given the tax burden on the most modest categories through labor income taxes and indirect taxes, a wealth tax with a broader scope is considered necessary to expand the tax base and ensure a proportional contribution to the actual payment capacity of the wealthiest.
Next Steps
Despite the rejection of this article in committee, the OTE indicates that parliamentarians still have the opportunity to strengthen the effectiveness and progressivity of this tax during upcoming plenary sessions.
