Tunisia’s financial landscape is marked by a persistent struggle to balance budgetary constraints with growing economic challenges, as evidenced by the recent passage of the 2026 Finance Law. While approved by both legislative chambers – the Assembly of the Representatives of the People and the National Council of Regions and Districts – the process revealed deep fissures regarding the scope of parliamentary influence over the national budget and the underlying structural issues plaguing the Tunisian economy.
The law’s promulgation by the President of the Republic followed a contentious debate, highlighted by the Finance Minister, Mechket Slama Khaldi, invoking Article 49 of the Law on the Budget (LOB) to oppose a parliamentary amendment proposing the creation of a specialized public institution for public transport. According to the Minister, such proposals fall outside the purview of the finance law and are the responsibility of the relevant minister. This tactic, employed repeatedly during the sessions, underscored a growing tension between the executive and legislative branches over budgetary control.
The Limits of Parliamentary Amendments
Article 49 of the LOB stipulates that any new expenditure proposed by parliamentarians must be offset by either identifying additional revenue sources or equivalent savings. Amendments altering the allocation of funds between programs are permitted, but only if corresponding objectives and indicators are adjusted. Parliamentary intervention is permissible as long as it remains fiscally neutral, a condition increasingly difficult to meet given the existing budgetary pressures.
The 2026 budget already projects a deficit of nearly 11 billion dinars, further limiting the room for maneuver. Many amendments were deemed non-compliant with the LOB because they risked compromising the budgetary balance established by the executive branch. The overall volume of expenditure increased from an initial 52 billion dinars in the draft proposal to nearly 63 billion dinars in the final adopted version, a substantial increase that raised concerns about fiscal sustainability.
According to Deputy Malik Kammoun, approximately fifty amendments were ultimately retained, but the process exposed deeper structural issues. The debate highlighted a fundamental constraint: a saturated budget incapable of absorbing even minor adjustments without jeopardizing its overall equilibrium. This situation, according to Ayoub Menzli, an expert in political economy, necessitates a shift in focus towards the internal dynamics of the budget, its rigidities and the economic logic that consistently produces a deficit.
A Deteriorating Fiscal Trajectory
The projected deficit for 2026, around 11,000 million dinars, marks a reversal of the consolidation trend observed between 2023 (-11,665 MDT) and 2025 (-10,150 MDT). This deterioration is attributed to increasing social pressures, particularly related to wages and subsidies, coupled with the inability to sustainably increase revenue within a tax system heavily reliant on households, while corporate contributions remain limited.
A 2023 report by the Court of Auditors confirms this assessment, noting that the growth of public expenditure between 2019 and 2023 outpaced potential economic growth, worsening the structural deficit by 1.4 percentage points of GDP. Certain tax reforms contributed to a further deterioration of nearly one additional percentage point.
Constrained Spending and Structural Imbalances
On the expenditure side, the scope for political decision-making appears severely constrained. In 2026, total expenditure reaches 63.6 billion dinars, with debt interest accounting for 17.3%. With operational costs already consuming 47% of the budget, nearly 60% is predetermined before any parliamentary intervention. Public investment, touted as a potential outcome of tax exemptions for companies, is relegated to just 2.5% of the budget.
the budget deficit, equivalent to approximately 21% of revenues, has become structural. It is entirely absorbed by debt servicing, meaning debt no longer finances development but merely sustains the deficit itself, creating a vicious cycle of high debt burden, reduced investment, slow growth, and persistent difficulty in reducing the deficit. Menzli points to fundamental macroeconomic imbalances within the Tunisian economy as contributing factors. Even with increased exports, imports – including essential commodities like oil, gas, cereals, and pharmaceuticals – are likely to remain higher, fueled by a reliance on low value-added products and foreign value chains.
The Role of Parliament as a “Shock Absorber”
The Finance Ministry consistently invoked Articles 66 and 69 of the Constitution, alongside Article 49 of the LOB, to justify rejecting amendments deemed unsustainable. Menzli argues that the finance law is essentially an annual exercise in survival: “how to mobilize resources to cover our expenses for the current year?” Long-term considerations are largely absent, and there is a lack of a structuring project or coherent economic levers. Parliament functions primarily as a “shock absorber,” mitigating social anger while real budgetary choices reflect a deep economic dependence.
This impasse is particularly evident in the management of social security systems, with the 2026 finance law already appearing inadequate to address the structural unsustainability of the CNSS, CNRPS, and CNAM. The Court of Auditors’ 2023 report highlights a chronic deficit within the CNSS since 2010, reaching 1.4 billion dinars in 2022, with a recovery rate below 70%. Without structural reform, the system risks insolvency.
Three Types of Amendments
Deputy Kammoun identifies three main motivations behind the proposed amendments: social concerns (tax relief for small farmers, support for people with disabilities, and the audiovisual sector); sector-specific interests (reduced VAT on photovoltaic panels, lower customs duties on certain inputs); and symbolic gestures lacking impact assessments or overall coherence. He notes that many amendments were adopted out of spite, aimed at undermining the Minister of Finance, reflecting a deep institutional distrust and the Parliament’s inability to assert itself as a genuine space for deliberation and control.
Despite the adoption of numerous amendments, the executive branch retains ultimate control. Amendments approved by Parliament often remain unimplemented, with the government citing reasons such as their irrelevance to the finance law or their dependence on executive decrees. No parliamentary amendment adopted in the past two years has been implemented, highlighting a systemic blockage. The lack of implementing decrees serves as a systematic justification, with Parliament lacking any leverage to enforce their implementation.
The situation is exacerbated by a lack of transparency from the executive branch, which provides limited detailed data on budget execution and previous finance laws, relying instead on general presentations already publicly available. This lack of cooperation contributes to the proliferation of additional articles in the finance law, which has become the primary avenue for parliamentary intervention, while numerous bills with significant social impact remain stalled.
