Tunisia: Tunisia Finance Profile
2015/01/10
Tunisia registered growth of 2.6% in 2013, below the official forecast (4.5%) and the 2012 level (3.7%). This slowdown can be explained by political deadlock, the worsening of the security situation, a fragile social context, stagnation in the euro area (the country’s chief client and chief supplier), and a 3.3% decline in agricultural production.
Unexpected resilience was shown by the key sectors of tourism (+2% in hard-currency revenues) and export industries (with growth of 6%), aided by the depreciation of the dinar (10% against the euro, 6.7% against the US dollar). Employment also showed timid improvement, with the unemployment rate declining to 15.7% in the third quarter of 2013 from 17 % in the same period a year earlier. Unemployment among young graduates nevertheless remains at a particularly worrisome level (34%, or one out of three), due to a widening gap between their abilities and the needs of businesses.
The chief macroeconomic indicators deteriorated and social spending, notably energy subsidies, weighed heavily on fiscal balances.
Growth is likely to resume in 2014 and 2015, bringing an end to the episode of recession that occurred in 2011 (-1.8%). And the current account deficit is likely to diminish in 2014 through economic recovery and the revival of tourism.
Tunisia is historically well integrated into global value chains (GVCs), notably in three industrial sectors: textiles and clothing; agro-industry; and the mechanical, electrical and electronics industries. The greatest evolution took place in the last, thanks to the development of automotive and aeronautics components, with exports progressing by an average 18% per year from 2000 to 2012. Tunisia’s three key industrial sectors account for 75% of the country’s exporting firms, and more than 65% of jobs in industry. New activities like information and communication technologies have developed recently, but their integration into GVCs has been limited to subcontracting links with limited added value, and they remain concentrated geographically along the coast. Tunisia’s integration into GVCs is being stimulated by free-trade agreements with the European Union (EU), but it is handicapped by various obstacles including trade and investment policies, the business climate, logistics, transport, regional imbalances, and technology transfers.
In the context of a political and security crisis, Tunisia registered moderate growth of 2.6% in 2013, down from the 2012 level (3.7%).
Growth is likely to accelerate in 2014 and 2015 in the calmer climate brought about by the adoption of a new constitution and the formation of a transitional government composed of technocrats.
Tunisia's return to durable growth will require a rationalisation of public spending and effective oversight of the financial sector, the labour market and investment.
Tax Break
- Corporation tax is 30% as a rule, 10% for companies operating in agriculture, handicrafts and small trades and 35% for a few limited sectors.
- Value added tax has a key rate of 18%, two reduced rates of 6% for sensitive products and 12% for some capital goods and services.
- Exemption of dividends paid by Tunisian companies to residents as well to non residents
- Conclusion of 69 fiscal agreements to avoid the double taxation, 48 of them have entered into force in the 1st January 2010.
- The customs duties dismantling program on industrial products began in 1996. It has:
- lifted customs duties of imported products from the European Union, including capital goods, inputs, and semi-finished products that are not locally made;
-
substantially reduced duties on the rest of imported products.
Tax incentives
- exports-derived income
- agricultural projects
- Projects located in zones promoting regional development belonging to the second group as well as priority zones promoting regional development.
Education, higher education, vocational training, environmental protection.
Tax cuts are granted for profits and reinvested earnings from 35% (general rule) to 100% providing a minimum tax of 20% on corporate general profits and 60% on personal income tax.
- Procurement contracts and privatization are systematically done through bids
- Competition and price law applicable since 1991. ensures transparency rules in commercial transactions
- A standardized accounting system drawn from the one in force in OECD countries.
- Corruption Perception Index (CPI) 2009
According to the basis of the business community's perception of corruption published by 'Transparency International'. Tunisia figures at the 65th place among 180 countries with a score of 4.2 ahead of many Arab countries, most African countries, as some European countries such as Romania, Greece...
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