Tariff and Non-Tariff Barriers
Tunisia is a member of the World Trade Organization (WTO). While maintaining restrictions on designated strategic areas, the Tunisian government is pursuing its program of freeing up imports. Approximately 97 percent of imported goods do not need prior authorization. This represents a substantial increase over 1986 when only 23.6 percent of imports could be freely imported. Government use of non-tariff barriers, however, has sometimes led to the delay or rejection of goods shipped to Tunisia.
Tunisia's import duties range from 10 percent to 230 percent. Certain luxury, durable goods (such as automobiles), or consumer items are also assessed a consumption tax that can be as high as 700 percent. Tunisia calculates VAT on the base price of the goods plus any import duties, surcharges, and consumption taxes.
Agricultural products are generally assessed high import duties and in some cases face other import barriers. Tunisia often gives preferential tariff rates to agricultural products originating in Arab and North African Nations. However, the government recently reversed this policy in the case of cotton after years of intervention by foreign suppliers. Cotton from major Arab suppliers had entered Tunisia duty free while that imported from other countries, required a 17 percent duty. As of January 1999, all cotton imports became duty free. Certain intermediate food products (such as cheese) can be subject to an even greater differential, up to 230 percent.
Imports are subject to maximum tariff rates as high as 230 percent. Goods are also subject to a customs formality fee, currently costing three percent of the total duties paid on the import. Certain imports are also liable to a Value Added Tax (VAT) and a consumption tax. These taxes also apply to locally produced items. Tunisia's three tier VAT rates are 29 percent, 18 percent and 6 percent, with the majority of goods covered by the 18 percent rate. Consumption tax rates can vary from 10 to as high as 700 percent and are also payable on similar locally produced items.
Tunisia still has some non-tariff barriers such as import licenses or quotas on certain products, particularly consumer goods that compete against locally produced equivalents manufactured by "developing" industries, such as textiles. Another major category affected by these barriers is motor vehicles, for which there is a strong local demand that could adversely affect the short-term balance of payments. For such products an importer of an individual vehicle must obtain a license from the ministry of commerce specifying the product, quantity and amount of foreign exchange needed. Without this license a bank will not authorize the foreign currency transaction. Alternatively, automobile importers representing manufacturers are awarded quotas based on the export revenue they generate (via car parts or other export industries). Certain imported products, including weapons or security-related materials and health-care products, remain strictly controlled.
Export controls exist on some limited products. These include items concerning security, public order, hygiene, health, and morality, protection of flora and fauna, and cultural heritage. Prior authorization is required for export of goods in these areas. Other products not in these categories may be subject to technical control to ensure that they meet international standards, or the standards of the importing country.
Offshore enterprises are allowed temporary entry of goods. Goods are allowed limited duty free entry into Tunisia for transformation and re-export. Factories in this area are considered bonded warehouses and have their own assigned customs personnel. Goods may also be granted temporary entry for use in trade shows.