President Moncef Marzouki stands in front of a coffin, draped in the Tunisian flag, of one of eight soldiers who died in an ambush by an armed group in Mount Chaambi, near the Algerian border.
President Moncef Marzouki stands in front of a coffin, draped in the Tunisian flag, of one of eight soldiers who died in an ambush by an armed group in Mount Chaambi, near the Algerian border.
President Moncef Marzouki stands in front of a coffin, draped in the Tunisian flag, of one of eight soldiers who died in an ambush by an armed group in Mount Chaambi, near the Algerian border.
President Moncef Marzouki stands in front of a coffin, draped in the Tunisian flag, of one of eight soldiers who died in an ambush by an armed group in Mount Chaambi, near the Algerian border.

Tunisian minister ready to quit as union calls for dissolution of government


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TUNIS // The Tunisian interior minister, Lotfi Ben Jeddou, said yesterday he was ready to resign, as the country's largest labour union called for the dissolution of the Islamist-led government.

The moves increased pressure on the moderate ruling Ennahda party, which softened its stance just one day after the prime minister vowed to stay in office amid growing anti-government protests.

Many Tunisians fear the tensions are pushing their country to what may be the worst political crisis since the country's autocratic leader Zine El Abidine Ben Ali was toppled.

The Islamist Ennahda party, which rules in coalition with two small secular parties, said it was ready for a new government, but would not disband an elected body that has almost completed a new draft constitution. "We are open to all proposals to reach an agreement, including a salvation or unity government," Ennahda official Ameur Larayedh said. "But we will not accept dissolving the Constituent Assembly. This is a red line."

Hours earlier, Mr Ben Jeddou told local Mosaique radio station, "I have a great wish to resign, and I am ready to resign".

"A salvation government or national unity government must be formed to get Tunisia out of this bottleneck."

He spoke after the Tunisian General Labour Union (UGTT) called for "dissolving the current government and creating a technocrat government led by an independent figure," the secretary, Hussein Abbassi, said. "We consider this government incapable of continuing its work."

The UGTT is a powerful force in Tunisia, with about 600,000 members it can call out on strike. Opposition leaders have been courting the group to support its calls to oust the government and dissolve the transitional Constituent Assembly, which is supposed to be creating a draft constitution.

The secular Ettakatol party - currently a member of the governing coalition - had also joined calls for a so-called salvation government on Monday.

More than 10,000 protesters took to the Tunis streets yesterday as demonstrations against the government, which began in response to the assassination of leftist politician Mohammed Brahmi last week, grew after gunmen killed eight soldiers near the Algerian border in one of the bloodiest attacks on Tunisian troops in decades.

"Tunisia is free, out with terrorism, out with Ghannouchi," protesters shouted, referring to Rached Ghannouchi, leader of Ennahda.

"Since they [Ennahda] came all we've seen is a string of catastrophes," said a protester, Noura Saleh, who was waving a Tunisian flag and crying: "Get out, we hate you!"

After the attack near the Algerian border, the Tunisian president, Moncef Marzouki, announced three days of mourning and warned of growing fissures in the country.

"In all countries of the world, when the state faces a terrorist attack people come together. But I don't see anything like that happening in Tunisia. All we see is divisions and chaos," Mr Marzouki said in a televised address.

"I call on all politicians at this historic moment to stand for the nation and unite."

The opposition, angered by two assassinations in its ranks and emboldened by the Egyptian army's ouster of Mohammed Morsi, has taken a hard stance in recent days. It is refusing several concessions and power-sharing proposals offered by Ennahda's governing coalition.

But addressing the nation late Monday, Tunisian prime minister Ali Larayedh rejected calls for his Islamist-led coalition to step down

"We aren't clinging to power, but we have a duty and a responsibility that we will exercise to the end," Mr Larayedh said, promising that a new constitution would be drafted by August, and general elections held on December 17.

The UGTT said that while it supported the call for a new government it would not back dissolving the Constituent Assembly, which is only weeks away from completing a draft constitution to put to popular referendum.

Opposition critics have argued that dissolving the Assembly and its draft constitution would risk even more long-term political instability.

"We propose maintaining the Constituent Assembly but ... with a time frame to speed up completion of its work," Mr Abbassi, the UGTT secretary, said. "We will be proposing this to all political parties because there is a need to clear the political bottleneck in this country."

* Reuters and Bloomberg

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

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Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

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Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

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Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

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Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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