Decentralization in Tunisia: Operationalization and Financing

Members of Workshop Jan 11-13
Members of Workshop Jan 11-13

Tunisians have chosen decentralization as their new form of state organization, and it is now embedded in the country’s 2014 Constitution. Decentralization allows the imparting of new powers to local bodies, the creation of new sources of tax revenue, and a totally different relationship between various levels of government. This transitory step from a highly centralized state, towards decentralized powers, requires the establishment of well-defined local communities, a clear division of powers, and a balanced financing of local communities. When studying the problem of intergovernmental financing, crucial issues relating to the magnitude of centralization and decentralization must be considered.

In this context, the Forum of Federations, with financial support from the Government of Canada, is following through with its project to support decentralization in Tunisia. The Forum aims to strengthen Tunisian institutions, and ensure better coordination throughout the decentralization process. In partnership with the Department of Finance, the Forum has organized three series of workshops titled “Decentralization in Tunisia: Operationalization and Financing”. Workshop participants were management-level officials from departments directly involved in the decentralization process, namely the three following branches of the Department of Finances: the Local Finances Unit, the Public Accounting Branch (DGCPR) and the Studies and Tax Legislation Branch (DGELF). The new Department of Regional Affairs was represented by the DGCL, and the Development Branch of the MDICI.

The first workshop, held from January 11 to 13, aimed to frame the issues and explore the founding principles behind decentralization, to allow participants to clearly understand the concepts underpinning decentralization in Tunisia and elsewhere. To explain the Tunisian context, Salsabil Kélibi gave a legal interpretation of the decentralization process in Tunisia, by referring to the articles of the Constitution and the local communities’ code project. Bernard Dafflon described the six underlying principles of decentralization (decentralization, administrative freedom, subsidiarity, financial autonomy, solidarity and co-operation), describing various international experiences such as the ones in the Balkan countries, Albania, Croatia and Switzerland.

The issue of territoriality is among the main prerequisites to the establishment of decentralization. M. Montacer discussed the national dimension of the issue, taking into account land-use planning, territorial delineation and the transfer of powers. Henda Gafsi tackled the question from a local perspective, and talked about the role of cities. She described the status of Tunisian cities in a global context, and examined their ineptness to organize as local powers. She formulated a series of recommendations, and proposed reforms to help cities adapt to the new context of decentralization. The Moroccan experience was described by Mohamed El Mensi, as well as several other international experiences, in order to inform and enlighten the participants who will be called upon to make decisions in the future.

The second workshop addressed taxation revenue and transfers, which are important issues the Department of Finance handles. Lazhar Mazigh, Director of the Department of Finance’s Local Finance Unit, gave an overview of Tunisia’s local finances, and Bernard Dafflon and Guy Gilbert re-examined the concepts of budgetary balance and transfers between the central State and its communities. André Juneau spoke about the international dimensions of decentralized taxes and the financing of local investments.

The third workshop focused on governance (i.e. budgets and control), and piloting with scoreboards and ratios. Following a presentation on the budget and accounting activities of local communities by Atef Farhat, head of Public Accounting at the Department of Finance, the director of the Public Accounting Unit, Habiba Bahar, talked about a plan to reform the State’s accounting plan and CL.

Presentations by international experts touched on the examination of articles of the local communities’ code project, according to accounting standards, to explain the deficiencies, and to determine measures of improvement for the Department of Finances’ consideration. Exchanges between experts and the Department of Finance officials led to fruitful discussions and productive debates on the next steps and measures needed to improve Tunisia’s local taxation in order to better adapt to the new decentralization framework.

An analysis of the evaluation sheets revealed that all participants were very satisfied and would like to pursue this type of training and exchange because they feel it supports them and the reform projects they are about to undertake.

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