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Tunisia Labor Union to Protest Austerity Budget

FILE - Protesters rally against Tunisian President Kais Saied, in Tunis, Oct. 15, 2022.

A powerful Tunisian labor union is expected to hold mass protests and "occupy the streets" to demonstrate its rejection of next year's austerity budget, its leader said Monday.

The union, known as Tunisia's General Labor Union (UGTT), said the protest will happen "soon" in its strongest challenge to the government of President Kais Saied yet.

"Why do we accept this situation? We will not accept it...we will occupy the streets to defend our choices and the interest of the people,” Noureddine Taboubi, head of UGTT said.

UGTT has over a million members, and has a proven track record of paralyzing the local economy with strikes. In the past, it has backed Saied after he seized most powers last year, but on other occasions has voiced opposition.

Tunisia's 2023 budget expects to reduce the fiscal deficit to 5.2% next year from a forecast 7.7% this year, driven by unpopular reforms that could pave the way for a final deal with the International Monetary Fund (IMF) on a rescue package.

The country will raise taxes for several professions, including lawyers, engineers and accountants from 13% to 19%

The tax hikes will affect several professions, including lawyers, engineers and accountants, from 13% to 19%. Taboubi said that this government is "a tax-collecting government...the Finance Law increases the suffering of Tunisians."

Finance Minister Samir Saeed said 2023 would be a "very difficult year," saying the government will also reduce subsidies' expenditures by 26.4%, mainly in energy and food.

This month, the government raised the prices of drinking water and is expected to regularly raise fuel prices in 2023 in order to reduce the growing energy deficit.

The budget has sparked widespread rejection from some professions with lawyers threatening what they called "a tax disobedience" in a statement.

Tunisia has reached a staff-level agreement with the Bretton Woods Institution for a $1.9 billion rescue package in exchange for unpopular reforms. These include cutting food and energy subsidies and overhauling public companies.

It hopes to reach a final deal early next year.

The 2023 budget showed that wage bill in the public sector will drop from 15.1% in 2022 to 14% next year, a main reform demanded by the IMF.