HomeInterviewTunisia: Med Salah Ayari to Africanmanager : ’’lowering fuel prices in 2015...

Tunisia: Med Salah Ayari to Africanmanager : ’’lowering fuel prices in 2015 will be essential for the government’’

Mohamed Salah Ayari, professor and tax advisor gave Africanmanager an exclusive interview in which he said the government would normally lower the price of fuel during the year 2015 due to the decrease in world oil prices.

He further stated that the measures provided for in the Finance Act for 2015 may not have a direct effect on the purchasing power of citizens as long as they have not addressed the policy of removing subsides on basic products.

Med Salah Ayari said, in the same context, that the outgoing government did not want to involve too much the ministerial team that will take over from, leaving it the latitude to take the appropriate decisions on all structural reforms.

Interview:

What are the most important measures for the draft budget law for 2015?

A priori, the draft budget law for 2015 does not include key measures that may have a significant impact on economic development, promotion of investment or the creation of jobs.

But in general, the most important measures in the draft budget law for 2015 are as follows:

– The reduction in the rate of withholding tax from 5% to 2.5% for fees, commissions, brokerage fees, rents and pays of non-commercial activities from export operations

– Reduction of the rate of withholding tax from 1.5% to 0.5% for amounts generated by the sale of goods, materials, equipment and services in the context of export transactions and amounts paid in return for the sales companies subject to corporate income tax at the reduced rate of 10%.

– Authorization of totally exporting companies to sell on the local market up to 50% of their turnover from export under the year 2014 and this, instead of 30% under the Investment Code.

– The return of the total amount of credit from VAT or Corporation tax for companies under the Directorate of Large Businesses, within a period not exceeding 7 days, and provided to present a special report by an auditor confirming the truthfulness of the credit amount.

– The promulgation of the Single Tax Code which includes all existing codes and unincorporated texts to tax codes so as to bring together all tax laws into one code and make tax matters more accessible to taxpayers.

– The extension of the payment of the exceptional temporary economic contribution under the second and third installment calculated on the basis of the tax due on the earnings for the financial years 2013 and 2014, and this for persons for whom the end of the fiscal year coincides with December 31st of the year. The same measure also applies to oil companies whose deadline for reporting their 2013 results expired before the entry into force of the provisions of the supplementary Finance Law for the year 2014.

– Taxation of donations of goods between ascendants and descendants and between spouses, which were subject to the fixed tax of 20 dinars per page and 100 dinars under land registration to the following rates:

– 2.5% for registration fees

– 1% under registration with the conservation of land ownership

– Improving conditions for the regularization of the situation of goods stored in customs warehouses and this by reducing the deadline from 4 months to 90 days, at which customs are authorized to sell the goods, by allowing the customs Administration to sell the goods whose value may deteriorate with time. This will be done only after permission of the President of the Court of First Instance, and by increasing from 1,000 dinars to 10,000 dinars the ceiling of the value of goods that can be considered abandoned in favor of the State, after the expiry of the storing deadline.

There is also the improvement of guarantees of taxpayers during the tax audit operations, and this by extending the deadline of response to requests for information or clarification or evidence provided by the tax audit services from 10 days 20 days, by extending the taxpayers’ response time to the results and notifications of the preliminary or in-depth checks from 30 days to 45 days, by requiring tax audit services to inform the taxpayer of the results of the preliminary examination within 90 days, which begins to run from the date of the request for information, accuracy or justification forwarded by the departments concerned, and requiring tax audit services to respond in writing to the opposition of the taxpayer to the results of the tax audits and this within a maximum period of 6 months

-The replacement of the travel tax which is paid in the form of a stamp of 60 dinars, by a flat tax equal to 1,000 dinars per year, for those who travel frequently and opt voluntarily for the payment of that tax, regardless of the number of trips made annually

-Exemption of loans granted by the Tunisian Solidarity Bank (BTS) from registration fees in the context of encouraging young entrepreneurs and artisans.

– Reduction of the age of vehicles other than passenger cars, imported as part of a project by Tunisian workers abroad from 7 years now to 5 years and this from January 1, 2015.

What do you think of this law in general?

It is noted that the draft budget law for 2015 does not include measures that can help to revive the economy, encourage investment and reduce the tax burden levied in particular on small and medium enterprises which represent more 90% of the economic fabric and can participate effectively in the implementation of new projects and the creation of job positions for which it would be appropriate to reduce the rate of corporate tax to 10% like agricultural, fisheries, crafts and export sectors.

Will this new budget law affect the purchasing power of Tunisians and specifically the middle class?

In reality, the measures provided for in the Finance Act for 2015 may not have a direct effect on the purchasing power of citizens as long as they have not addressed the policy of removing subsidies on basic products.

Regarding fuel, the price of oil was estimated at 110 dollars in the State budget for the year 2014; we find that the prices globally have continued to decrease to 89 dollars/barrel or even less.

Moreover, it is in the same spirit that the price of oil was estimated at $ 95 in the draft state budget for 2015.

Logically, and if the estimated price per barrel at the state budget would be indexed to the global oil price, the Government should normally lower fuel prices during the year 2015.

A priori, the outgoing Government has not wanted to involve too much the new government, leaving it all the fullness to take appropriate decisions on all structural reforms concerning the tax reform, reform of the banking sector, the policy of removal of subsidies, the promulgation of the new investment code and the enactment of the law governing the public private partnership (PPP).

The growth rate has been fixed in the draft state budget for 2015 to 3%. Is it possible to achieve this rate for that year?

Actually, we have seen in recent years wacky estimates of growth rates to the point that the difference was obvious between the estimated rates and achieved rates.

Indeed, the growth rate for 2013 was initially estimated at 3.6%, but it has not exceeded the limit of 2.3%.

For the year 2014, the growth rate was estimated in the initial budget level to 4%, but was revised downwards to 2.8% under the supplementary finance law for the year. But all estimates converge to a maximum rate of 2.5%.

So realistically, the 3% that was expected in the draft state budget for 2015 can be considered as a consistent rate, and this provided to ensure the political stability, establish security and initiate the structural reforms long awaited by both Tunisian and foreign investors.

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