An Outline On Tunisian Taxation and Investment Incentives

Abstract

Like its North African neighbours, Morocco, Algeria and Libya, Tunisia is an Arabic-speaking, traditionally Moslem country. It was nominally part of the Ottoman Turkish Empire until the latter part of the nineteenth century, although the real ruler was the local prince known as the Bey of Tunis. In 1881 France invaded the country from Algeria and established a protectorate, with the Bey remaining the nominal ruler but France exercising real control over all areas of government. French rule continued until 1956, apart from a brief interruption during the Second World War when the country was under first German and then Allied (British and American) control. In 1956 Tunisia achieved independence under the leadership of Habib Bourguiba. Bourguiba adopted moderate economic policies, non-aligned foreign policy involving the retention of close links with the former colonial power, and revolutionary social policies designed to end the traditional Islamic way of life and replace it by one modelled on modern European values. Universal primary education was introduced for boys and girls, wearing of the veil was banned, and women were encouraged to play an acove part in public life. Bourguiba exercised power through the Neo-Destour Party and for most of his presidency the country was in praciice a one-party state. In 1987 Bourguiba, who was in his eighties and in poor health, was removed on medical grounds, and replaced by the current President Zine E1 Abidine Ben Ali. The main features of the current presidency have been: (1) Strong moves to encourage trade, develop free market policies, and remove bureaucratic rigidities and obstacles; (2) Continuing moves toward the introduction of Parliamentary democracy.