A man arranges bread at the shop of a bakery in Tunis, Tunisia, December 1, 2017. REUTERS/Zoubeir Souissi
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Tunisia plans to launch long-awaited reforms to reduce its chronic budget deficit, but the measures could harm investment if the government imposes new taxes and resists cutting the bloated public sector in order to avoid social unrest.Hoping to secure further IMF finance to fund the 2018 budget, Economic Reforms Minister Taoufik Rajhi said the government would launch "unprecedented reforms" to cut the deficit to 4.9 percent in 2018 from 6 percent this year.That would put Tunisia at odds with its lenders.Tunisian officials also want to raise taxes on bank profits to 40 percent from 35 percent.Last year, the government imposed a temporary 7 percent tax on companies to help finance the budget, 45 percent of which is spent on public sector salaries.In April, the IMF agreed to pay out a delayed $320 million second tranche of a $2.8 billion loan to Tunisia after complaining about lack of progress in cutting the public sector.
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