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The House of People's Representatives (HPR), on Wednesday, passed the bill on tax incentives.
The objective of the bill is to streamline and simplify the tax incentive system by focusing on those (incentives) that reflect the priorities of the next period such as regional development, export and fisheries.
Another objective assigned to this project is to reduce the number of investment incentive mechanisms by maintaining the incentives that have proved their efficiency, in particular the savings mechanisms over the medium and long terms.
The draft law emphasises the importance of these incentives and their role in ensuring the stability of investment financing; in respect of life insurance contracts, stock savings accounts and savings accounts for investment.
The project, which is a new, clear and transparent system, is based on simplified mechanisms to achieve the objectives of regional development and food security by encouraging investment in agricultural development activities.
It also provides for boosting exports, particularly in priority sectors, which will make it possible to consolidate the competitiveness of certain sectors with high added value, create jobs for higher education graduates and encourage the creation of companies operating in the craft sectors and support activities (health, education, culture, vocational training and animation for young people ...).
The project will allow firms located in the inland regions to fully deduct income and profits from investments in regional development zones during the first five years of actual entry into operation with regard to the first group of regional development areas and totally during the first ten years of entry into operation for the second group of regional development areas.
It also involves alleviating the tax burden on businesses located in regional development zones even after the end of the period of total deduction of income and profits from operations.
In terms of export incentives, the project should allow fully exporting companies to entirely deduct from the tax base of the income reinvested within them without requiring the minimum taxation until December 31, 2025 and to allow investors subscribing to their capital to fully deduct the reinvested earnings and profits, while taking into account the minimum tax.
It is also proposed to exempt concerned firms from the tax on vocational training, from the contribution to the fund for the promotion of housing to employees (FOPROLOS) and from the rest of the contributions to the specific Treasury funds.
In order to guide investors towards contribution to companies operating in priority sectors such as information and communication technologies (ICT), the automotive and aeronautical components industry and the pharmaceutical industries, the bill suggests allowing investors to deduct all income and profits reinvested in the capital subscription of the mentioned companies from the income tax base or corporation tax.
New companies will also benefit from deductions of 100%, 75%, 50% and 25% from their profits or operating income in the first four years of operation, with the exception of companies active in the financial sector as well as the hydrocarbons and mining sectors, property development, consumption and communication network operators.
The draft law proposes, as part of the simplification of tax laws, the cancellation of tax benefits related to reinvestment in companies involved in the assembly of IT equipment and the IT services and engineering sector.
© Tunis-Afrique Presse 2017
