(Ecofin Agency) - Tunis stock exchange experienced its most important drop since May 2018 yesterday Monday 10, December 2018. This black Monday on the stock exchange was due to the decline of the value of listed banks' shares.

Banque Internationale Arabe de Tunisie dropped  6.09% to 121.430 dinars, Banque de Tunisie dropped 6% to 7,520 dinars, UIB (Société Générale Tunisie) has seen the value of its shares drop 6.08% to 23.480 dinars while Attijari Bank lost 4.92% and Banque de l'Habitat 4.75%. 

The reason why those listed banks dropped in the stock exchange is the adoption, by the country’s national assembly, of a provision imposing 1% tax on each of transactions.

It is difficult to indicate the transfers but, the professional association of Tunisian banks and credit institutions spoke up to strongly condemn a measure that would add to the pressure in the sector in a context marked by low liquidity, according to them.

On the basis of the global performances at the end of the first nine months of 2018, this tax would have cost all the listed banks 30 million Tunisian dinars and 43 million Tunisian dinars for the whole sector. Banks, which are already experiencing a high labour cost, reveal that the measure has been difficult to digest.  

The government quickly stepped in and asked the parliament to suspend the implementation of the measure. This request was just partially met. Indeed, the assembly agreed to delay the implementation of this tax to 2020. In addition, the government also obtained the conversion of taxes on transactions to taxes on turnover.

Tunisia has to make difficult choices and also continue to contain the budget deficit that it was able to greatly reduce during the first nine months of 2018. However, its 1% tax is hard for banks to accept. Tunisian observers criticize a new pressure that adds to a taxation level deemed already too high. It is not clear whether the delay in the implementation of this measure is only for financial institutions or for all the sectors the tax was applied to.  

Idriss Linge