IDG designed an MCC Threshold Program investment to improve governance and labor markets in Tunisia. In designing the program, IDG conducted a comprehensive analysis of the fiscal burden on labor. Tunisia’s numerous costly, fragmented state programs were funded through high taxes on companies, particularly on labor through social contributions and personal income taxes. Instead of safeguarding workers, these policies instead harmed workers by hindering job creation and long-term growth. IDG made recommendations on (1) revising laws and regulations to minimize risk of abuse, strengthen auditors’ access to information, and introduce penalties for violation of tax obligations, (2) streamlining and re-engineering business processes; and (3) improving external accountability through the development of a three-tiered accountability mechanism. IDG recommended and designed a new social contract that would protect and support workers while enabling rather than impeding job creation by reducing tax rate and facilitating labor-market flexibility. The scope of the designed project considered the quantitative aspects of all the elements of the fiscal burden on labor and involved all relevant counterparts in preparing and analyzing the information to arrive at a unified position on reform proposals. The scope of the designed project considered the quantitative aspects of fiscal burden on labor and involved all relevant counterparts in preparing and analyzing the information to arrive at a unified position on reform proposals.
IDG conducted a comprehensive analysis of the fiscal burden on labor and made recommendations on reducing tax rates obstructing job creation, widening the tax base, and reducing state expenditures.
IDG prepared recommendations for an MCC program design intended to improve customs administration, clearance processes, and cross border trade and security in Tunisia. IDG recommended legal and regulatory framework reforms to streamline customs clearance with clear and precise standards, processes, and procedures for importing and exporting to increase predictability, efficiency, and security. Highlighting these areas, the proposed program design sought to improve trade facilitation in Tunisia, reduce the time and cost of transporting goods to the marketplace, and create predictability and transparency in customs.