TUNIS: Tunisia expects to reduce its fiscal deficit to 5.5% of gross domestic product next year from 6.3% this year, driven by higher taxes on firms and high-income employees, its draft budget showed on Monday.

The North African country also hopes to boost economic growth to 3.2% in 2025 compared with 2.1% planned for 2024, it said.

Tunisia faces a severe financial crisis and has struggled to find funding since its negotiations with the International Monetary Fund for a loan stalled in 2022. That has led to a shortage of goods such as sugar, coffee, rice and tea.

The country expects public debt to fall in 2025 to 80.5% of GDP from 82.2% in 2024. The size of the budget in 2025 will be 78.2 billion dinars ($25.18 billion), up 3.3% from the current year.

Tax revenues will increase by 7.3% next year from 2024 to reach $14.57 billion, it said.

While the government intends to reduce taxes on low-income earners, it will gradually raise it for those whose annual salary exceeds 30,000 dinars ($9,000).

Taxes for workers with an annual income above 50,000 dinars will rise to 40% in 2025 from 35%.

Companies with turnover of 20 million dinars or more will see taxes rise to 25% next year from 15%.

The draft budget showed the government aims to cut the wage bill for the public sector to 13.3% of GDP in 2025 from 13.6% this year.

($1 = 3.1051 Tunisian dinars)

(Reporting by Tarek Amara; Editing by Christopher Cushing and Jamie Freed)