b- Editions Kahia - Grafica Roma

published by national office of and societe tunisienne de banque

a study of the existing and pc

4 ltential structure of tourism foreword Tourism in is growing and has become both an important source of foreign exchange for the economy and source of employment for many towns and villages. The importance of foreign exchange and the potential of tourism has caused the Tunisian Government to devote a great deal of effort toward attracting an increasing number of visitors. It is believed that this industry, as it presently exists, and with development anticipated in the future, constitutes an excellent investment opportunity for American and foreign businessmen. Before further investments are made to accommodate additional tourists, it is essential that the potential market be examined to determine from what geographical area the tourists ori- ginate, their possible mode of transport, why they visit a particular area, what they spend, how long they stay, when they come, and how many visit the country. Once the pattern of the tourist market is known, interested investors can evaluate in detail, the region's resources (attractions) with respect to what is lacking, and what the tourist desires. When this determination is made, the process of creating new facilities should begin. The tourist resources of Tunisia, as described in this report, consist of the beauty of the landscape, the monuments of historic and cultural interest, and the existence of towns that are both attractive and able to furnish facilities for recreation, shopping, etc., while providing the necessary physical elements, viz., water, communications, power, etc., which are basic requirements essential to support hotels and related facilities. The variety and wealth of Tunisia's tourist attractions, situated as they are in the heart of the Mediterranean, offer every advantage for the country to become a focal point for the interna- tional tourist trade. Principally, these are the sun, the surf, the beautiful beaches, the ideal climate, and the wealth of archeological treasures left by civilizations which, one after the other, played out their destinies on Tunisian soil, leaving behind numerous monuments and ancient cities. While nothing can replace a personal trip to Tunisia for the purpose of com- municating ideas and observing for oneself the investment potential that exists in the tourist industry, it is hoped this report will serve as an introduction and to illustrate that Tunisia is one of the few places in the world where the tourist can compress centuries of history into a pleasant environment. These factors, when matched with the country's proximity to the rich and vast European tourist market, together with Tunisia's need for additional and better hotels, motels, and amusements of all forms, merit further examination by investors. The investor interested in tourist attractions and accommodations will discover upon exami- nation that certain sections of this report are very specific, while others are general in nature. The Purpose of this report is to introduce both the general business, and physical environ- ment as it exists in the Tunisian tourist sector. This report will point out specific investment OPPortunities to hotel and motel entrepreneurs, manufacturers of hotel and motel equipment, Producers of recreation facilities and businessmen willing to invest in recreation and ssrvice establishments.

- - introduction to tunisia

iun~sla,located an ihe norlhern oasi of kir

At the present Tunisla's transpor!ation facilities are ade- transportatjon quate for the country to fully accommodate a sizeable increase in the tourist trade. RAILWAYS. All major commercial tourist centers are con- nected by rail. Thls railroad network is admin~stered by the Tunisian Railroad Company, and consists of the follow- ing: 963 miles of narrow gauge 3' - 3 3/8" and 280 miles of standard gauge 4' - 8%". The motive power is diesel and diesel electric. HIGHWAYS. The Tunis~anhighway network covers 5,000 miles of paved road. These roads are well posted and maintained, although temporary interruptions may occur in southern areas during and after heavy rains. There are 520 public vehicles with a total of 21,800 seats. They are owned by over 100 firms some of which, however, are small family businesses. There are also 700 hire-cars and taxicabs with a total of 4,000 seats. There is regular bus service as well as char!er service to tourist sites. Taxi stations are available in the major cities and automobiles may be rented at prices comparable to those in the and Europe. SEAPORTS. Located along Tunisia's coast line are 4 malor and 22 minor ports providing access to the country by sea. Tunis- is the major port, situated at the end of a lagoon and connected by a 6 mile channel. The port possesses berths several hundred yards long for vessels with over 20 ft. draughts. At this port, a new berth, 7,500 feet square with a depth of over 4 fathoms has just been completed. The port of is a natural 46 square-mile bay of clear water with depths up to 40 feet. It is joined to the sea by a channel, a mile and half long and 220 yards wide. The port of is an artificial port serving the phos- phate industry. The port of is the major phosphate port. All of the above ports are continuously being improved, enlarged and modernized. Table 1 indicates characteristics for the five major ports. Table 2 indicates the type of service provided by steam- ship companies maintaining regular service between Tunisian and European Mediterranean ports which are: Navigation Company of Tunisia - agents for the General Transatlantic Company. Tirrenia Company - an Italian firm. Navigation Mixte Company - a French line. In addition, several European tourist ship lines call at Tunisian ports. AIRPORTS. At the present time there is adequate air serv- ice to Europe and the United States. and are linked direct to Tunisia by a regular passenger service and there is a continuous shuttle of tourists. The main directions of flight are towards Paris, Marseille, Nice, and Rome. The airport of Tunis-El Aouina is equipped with adequate facilities, a new 3,300 yard runway has been completed which accommodates multi-jet aircraft. Airfields are locat- ed at Sfax, Gabes, and Djerba. The runway at Djerba has been enlarged to accommodate jet aircraft of Caravelle category. New airfields will be constructed at Monastir and . Elements of existing air transportation factors may be studied in Table 3. The following air lines have opened offices and started operations in Tunisia: Tunis Air, KLM, Air France, United Arab Airlines, Alitalia, TWA, TABSO, and Air . Other airlines operate charter tourist flights to Tunis, e.g., Swiss Air, Condor, LTU. All have indicated that with the growth of tourism they anticipate increases in traffic.

I Tunisia's dazzling sites and its landscape are corn-i bined in a small area which comprises the mysterious, enchantment of the Saharian oases of Tozeur and Nefta, the snowy loneliness of the forests at Ain-Dra- ham, the excitement of the beaches of Hammamet or Gammarth, the polynesian magic of the Island of Djerba and the secret attractions of Sidi Bou-Said, which is lost in time on its rock overlooking one of the most beautiful gulfs in the world. A summary of these and other tourist attractions follow, these sites may be studied together with area facilities on the map showing Tunisian Tourist Attractions and Ac. commodations.

the sea

The 800 miles of coast line, varied in aspect, contain an enormous number of spacious beaches. The sand is fine and the beaches easy of access. Generally speaking, the sea is calm, safe and agreeably warm Islands and islets, inhabited or deserted, are dotted along the coast at varying intervals. There are numerous natural sites all over the country having remarkable panoramas of the sea, the lakes the mountains and sand dunes. A great quantity of hot mineral springs with healing properties gush from the soil near the sea shore. The numerous gulfs, rocky reefs, mud or sand bot toms, and the underwater meadows of the coast, art the habitat of every conceivable variety of Medite~ ranean fish. Archeological riches are found in various spots nea the sea, many consisting of imposing groups of an cient monuments, some intact, others in ruins depict ing Carthaginian, Roman, Byzantine and Mosler civilizations. Sea side bathing areas are available to meet the mos sophisticated desires for sea side living, sun bathinc open-air life, and water sports. attractions Tunisia, with the variety and extent of her beache! her permanent sunshine, the luminosity of her skie! the prolonged duration of the summer season is ver well placed for the promotion and operation of add tional bathing resorts. This together with the ove' crowding of French and Italian resorts in Europe, an Tunisia's proximity to the European tourist mark( make of Tunisia a natural Mediterranean vacatio area.

archeology

CARTHAGE - Of Punic nothing whatsoevf remains except its burial grounds. Archeologists ha\ partly uncovered the court-yard of the sanctuary' Tarit and Baal Hammon, where the appalling sac' fices of children took place. However, one centu after its destruction Carthage was to grow up aila ;n :he :ime of Augustus. Of Roman Carthage, the DOUGGA (THUGGA) - The city of Thugga rises in paved streets have been uncovered, as well as the tiers on the slopes of a hill. Visits can be made to the enormous ~aths,built by Antonius, the Pious, and the Capitol, to the temple of Celestis, the wlnter baths, ,,phitheater where the bloody martyrdom of the the monumental town gates and the residential quar- Saints occurred. ters with its houses and paved streets still bearing ~11 discoveries resulting from the ex- the marks of ancient chariots. cavations carried out by the White Fathers (Priests) At the foot of the hill there is a Libyco-Punic Mauso- are preserved in the Lavigeries Museum. In Carthage, leum from the 2nd century B.C., precious remains of one can see the finest collection of Punic objects in a hybriad architecture are entirely restored. the world. A whole quarter of the old Roman town has been arranged as an outdoor museum where, (SUFETULA) - On the forum of Sufetula, under the shade of cypress trees, the latest archeo- after passing through a monumental gateway dating logical finds are exhibited. from Antonius, the Pious, stand three temples. There are summer and winter baths in a good state of pre- UTlCA - The burial grounds of Punic Utica have servation and a few Christian monuments. been excavated and the vases, amulets, and jewelry found in the tombs are exhibited in the small anti- quarium. The main interest in the site consists of the SOUSSE - Housed in a building alongside the tower Roman city dating from one century B.C. to the end of the old Arab Kasbah, the Museum of Sousse con- of the first century A.D. In the city of Cato, broad tains one of the best collections of Roman mosaics streets have been discovered with porticos and fine in the whole of North . Christian catacombs can houses with marble and mosaic paving. be visited consisting of 200 tunnels with 15,000 tombs dating from the 2nd and 3rd centuries. BULLA REGGIA - Is of particular interest because of its villas with their basement floors where excep- tionally fine mosaics with the original figures are still in place. A temple to Apollo, a sanctuary to Isis, large the desert baths, and a theater have been discovered.

In southern Tunisia, at the threshold of the Sahara (THYSDRUS) - Remains of the Roman city Desert, lies a series of oases which water the palm of Thysdrus with a large amphitheater in a better country. Against the barrenness of the desert land- state of preservation than the amphitheater in Rome. scape, the village of Tozeur stands out as an island It was capable of holding 30,000 spectators. in a sea of sand. Here spring-waters flow into a net- work of canals and one can stroll through lush gar- THUBURBO MAJUS - A forum, dominated by a big dens with a cloudless sky overhead. capitol, is the principal item of interest on this site. It is possible to visit many sanctuaries, thermal baths, a market, and several very fine private dwellings TOZEUR and KEBlLl are the two primary tourist areas Paved with mosaics. situated on the Chott El Djerid, a great expanse of glittering salt where it is possible for one to journey (MAKTARIS) - Excavations at Maktaris some 30 miles in the center of an immense and have revealed a triumphal arch from the time of desolate area. Muddy in winter and covered in sum- Trajan, a forum with paving which is completely pre- mer with a glittering, crackling crust; this IS the sea- served, an amphitheater and thermal baths which are son when fantastic forests and cities seem to appear among the best preserved in the whole of Africa. on the horizon, only to be discovered as mirages. Christian Churches of the 4th, 5th and 6th centuries. Vestiges of Roman water systems are also found An antiquarium houses statues, pottery and inscrip- nearby and tourists may ride camels through the tions. oases and observe organized dances and festivals. A large number of people are attracted in midwinter TUNIS - The Museum of Bardo is situated in one of to southern Tunisia for a short stay in a sunny oasis. the former palaces of the Bey. It contains a collection In midwinter Tunisia offers European visitors relief Of mosaics and fine specimens of Greek art, marble, from the cold and foggy climate of Europe. and bronze statues and the remains of an ancient The problem of this area is one characterized by very ship. lively points of interest separated by long and often monotonous distances. This is realized by the Office - The remains of a remarkable num- of Tourism as well as the Societe Hsteliere et Touris- Phaeum. It is the origin of the aqueduct built by tique de Tunisie (SHTT). Steps are being taken to Hadrian to supply water to Carthage, many miles improve the existing highway to this region and install distant. interesting rest stops along the route.

There are many religious holidays and folklore feasts religious throughout the year In Tunisia. Descriptions of festivities several follow: and Rarnadhan - Is a holy month of fasting. Publ~crejoic- ing takes place each evening after sunset until 2 folklore o'clock in the morning. AH the cities are illuminated feastS and there are oriental concerts. Aid-Es-Seghir - The feast ending the month of fast- ing, a feait for the children. Aid-El Kebir- Is the holiday during which it is custom- ary for every faithful Moslem to sacrifice a lamb. Mouled - Anniversary of the birth of the Prophet Mohamed. In addition, there are Christian holidays such as the Feast of Saint Perpetue, Easter Procession of the Holy Virgin and the Procession of the Madonna of Trapani. There are Jewish holidays, such as the pilgrimage of Ghriba and oriental feasts on the island of Djerba. The pilgrimage of the Holy Great Rabbi Jaco S'ama, the holiday of Roch Hachana, Youm Kippur. Folklore feasts such as the Palm Tree Festival take place during the picking of dates. Rides on camel back and planned meals served under bedouin tents are available to the tourists at this time. Also there is a Camel Festival featuring camel races. A Sheep Festival, with a contest of the best stock breeders, during which a lunch is organized under be- douin tents. There are rides, races, songs and dances. The Tree Festival takes place to celebrate this tree at . Fairs take place each year in Tunis, at Sfax, Sousse, Nabeul, Beja and Djerba.

The capital city of Tunis consists of both an Arab miscellaneous and European styled city. The Arab souks (shops) attractions movie theaters, bars and side-walk cafes, cabarets, the Casino in Belvedere Park, and horse-racing, all provide the tourist with an exciting visit. Tunis is the gateway to all of Tunisia. Hunting in the mountains of and Cap Bon for wild boar, fox, gazelle, and quail in the spring. Fishing, by both classical or regional methods, for bass, gilt head, mullet, skate, mackrel and tuna is enjoyed. Thermal baths, scientifically equipped, are located at and Ain Melliti near Teboursouk. These waters are recommended for many digestive troubles. The Ain Melliti water is bicarborated and slightly calcic and is classified as very good on the scale of mineralizations. The water at the Korbous thermal station is mineralized by chlorides with a predomin- ance of sodium chloride and calcium chloride. Sizeable museums, both in and out doors, exhibit a considerable variety of archeological finds and valuable art collections. Many towns and villages, either as a whole, or in some of their quarters, have retained the charm of the past or have a style curious to the tourist. A large variety of traditional wares is produced by Tunisian artisans in various centers: carpets, mats, embroidered cloths, copperwork, gold and silver work, woodcarvings, pottery and ceramics can read- ily be purchased by the tourist. There is a variety of original costumes and music, traditional and regional fiestas. The holy city of is a memorial to Arab civilization at its height. Today, one may see its im- posing mosques, and its minarets.

The major controlling influences on Tunisia's climatQ are the Mediterranean Sea and the Sahara Desert,* In general, the Atlas mountain range divides the country into two distinct climatic zones with Mediter: ranean influences predominating in the north and Saharian influences in the south. Summers from May through September, are hot and dry, winters are mild with frequent rains. The transi; tional seasons are short because the two principal seasons may merge abruptly. Rain decreases from north to south in Tunisia. In the north there is an average of approximately 70 to 110 rainy days a year. In the middle region of Tunisia rainfall becomes scarce with an average of 30 to 40 days per year. In the south rain falls less than 30 days per year. The rainy season begins in October and ends in April. During the rainy season, beautiful sunny, days alternate with the short rainy periods to make Tunisia pleasant in winter. Tunisia enjoys an extremely high rate of sunshine, cloudy days are few, rain is infrequent. Tunisia has the advantage of being near the sea, where the broad coast-line softens the winter tern- perature and lessens the summer warmth. During the winter the temperature rarely drops below 41" along the coast while in the interior the minimum average temperature goes down to 35'. In summer the sea breeze lowers the minimum aver- age temperature along the coast to a level between 85" - 95". Inland, in the middle region, the maximum average is about 95" to 100 reaching 109" in tha southern oases. Strong winds seldom blow in Tunisia, a sea breeze blows in the morning and decreases in the evening rendering the Tunisian coast line very pleasant. A hot south-west wind does blow for 2 to 5 days in August which becomes rather depressing. However, it some- times stops at night and is replaced by a sea breeze. Thus, the mild climate of Tunisia is ideal for tourism during the winter months. The map, Average Monthly Temperature for Selected Areas, graphically illustrates Tunisia's climatic advantage over European countries.

CLIMATIC TRENDS IN EUROPE. Great Britain and Western Europe are visibly experiencing a "cooling trend" which has been under way for more than twenty years. One explanation of the unusually cold and wet weather that prevailed in the winter of 1962 the climate can be related to this "cooling trend" of the Northern Hemisphere. Climatologists of the United States Weather Bureau, have stated that the weather of this area seems to swing back and forth, between warm and cold cycles The cooling trend will probably continue for the next ten years ... perhaps for several decades. What causes the change? Many explanations are given, from changes in ocean currents to changes in the carbon-dioxide content of the atmosphere. How does it affect the economy of Tunisia? Because of Tunisia's proximity to the European tourist market one can expect to witness an annual increase in the number of tourists seeking the warmth of an African sun. An example of this annual increase can be ob. served on the graph, Projection of Tunisia's Visitors to 1967. At the end of 1963 more than 100,000 people had entered Tunisia since the beginning of the year A conservative estimate places the total number 01 visitors for the entire year of 1964 somewhere be- tween 120,000 and 150,000 visitors.

Europe In February, "Froid," Cold, Chilly, But Not Under The Warm Tunisian Sun,

NUMBER OF UNITED STATES RESIDENTS Table 4. C Mode of Travel

Total -. IG IN EUROPE AND MEDITERRANEAN AREA In 1960, the total foreign exchange earnings resulting from foreign visitors entering Tunisia for all purposes, i.e., tourism, business, students, etc., totaled the equivalent of $5.7 million. In 1961, foreign exchange earnings fell to $3.8 million, chiefly because of the political problem in Bizerte. However, 1962 saw thousands) (thousands) (thousands) revenues climb back to $4.8 milion. In 1963 revenue earned from the tourist reached $8.6 million. In con- trast, the tourist business in Europe totaled approx- imately $6 billion in 1962. During that year Tunisia's total number of visitors increased from approximately 53,000 in 1962, to more than 100,000 by the end of 1963. A conservative estimate of the total visitors for the entire year of 1964 is expected to exceed 120,000.

The origin of Tunisia's visitors for 1962 and 1963 are listed by nationality, month and season in Table 7. The statistics for 1962 can be studied graphically on the four seasonal maps furnished in this report. The year 1962 was selected to permit a detailed seasonal examination of an entire year based on complete annual statistics. Few European countries have figures or estimates of the numbers of their nationals who Source: U.S. Dept. of Commerce, Office of Business Economics. go abroad for the purpose of tourist travel. However, because Europe does represent the market for Tun- isia's tourist industry the comments which follow will furnish some indication of the size of this market. A national survey, carried out by the British Travel and Holidays Association, indicated the following nationalities took holidays abroad. These are the approximate figures for 1962 as indicated in the survey:

--- N/A (Ireland excluded) 3,500,000 ITALY 2,000,000 FRANCE

IRELAND 594.000 564.000

Generally, the European tourist goes "abroad" to a neighboring country. The most important tourist clientele in Europe, is by priority, German, American, English and French. average expenditures - $704. However, this order of priority does not remain the same for Tunisia. A review of Table 7, and the maps, Origin of Tunisia's Visitors, By Season, will reveal that the largest number of Tunisia's visitors in 1962 were French. An examination of the characteristics of the French visitor, according to various inquiries in France, in- dicates that 38 per cent of the French people take holidays away from home. Eighty seven per cent of the French vacation in the summer season, while 13 per cent of the French take holidays during one of the other three seasons of the year. lt is also known that 23 per cent of the French, while on holiday, prefer the sea, 23 per cent go to the Table 5. European Hotel Registration By country, 12 per cent visit the mountains, 12 per cent lndigenous Tourists, By Country 1962 go on tours, 12 per cent go abroad, 14 per cent vaca- - tion in provincial towns and 3 per cent go to a spa. Total Number Of Country Indigenous Tourists Tunisia can offer the French tourist all of these types (million) oi vacation in combination with one another. The American visitor is an important tourist to Europe FRANCE 14.0 and the Mediterranean area. He could be easily attracted to Tunisia, even though at present the ITALY 10.0 largest number of Americans currently visit France. The number of U.S. tourist going abroad (other than GERMANY 27.1 to Mexico and Canada) totaled 931,000 in 1962. These ENGLAND visitors, who stayed on the average in three or four - - different countries, went mainly to France (517,000), SCANDINAVIAN COUNTRIES Unknown the United Kingdom (479,000),Italy (417,000),and Ger- many (347,000). At the present, Europe is the main 2.9 attraction for the American tourist. It need not remain so. Considering the expense the American pays to Other (l) 9.9 reach Europe, there is no reason why he can't be induced to include a side trip to Africa. He has (1) Includes. Austria, Ireland. Yugoslavla. . invested approximately $860. if travelling by sea and $650. if travelling by air to Europe. For an additional Table 6. Population, Per Capita Income, And sum ranging from $62. ('1 to $260. @), depending on Estimated Number Of Europeans Earning The his location in Europe and mode of travel, a visit to Equivalent Of $5,000 Or More Per Year By Tunisia can be included within his total transportation Nationality costs. A comparison of the main characteristics of the entire Total Number of Individuals Total Per Capita U.S. population, e.g., geographic distribution, age and Country Earning $5.000 or More' p$iig,!$ Income(2) (Eatimate) (4) (Dollars) income with the corresponding characteristics of the American visitor to Europe and the Mediterranean AUSTRIA 15,000 7.0(') 587 area clearly indicates that the minimum estimate of the potential international travel market amounts to 24,424 9.1 ("1 939 5 per cent of the United States population. There are, therefore, nine million Americans who can afford a NETHERLANDS 85,000 11.4(3) 750 trip to Europe with side trip to Tunisia. SWITZERLAND 55,022 5.4(l) 1,314 Statistics are presented for the European tourist market, Table 5 will give some indication of the num- 23,390 4.W 993 ber of Europeans utilizing hotels in their own country, thus not vacationing beyond the borders of their own 28,252 3s3) 944 land. No doubt many of these individuals can be in- duced to vacation in Tunisia. 1 69,187 7.4n 1,384 A recent study prepared for the United States Travel FRANCE 300,000 44.8(3) 900 Service of the U.S. Department of Commerce was conducted to examine the European tourist market in WEST GERMANY 327,600 53.0a 829 detail. This study assumed that as far as the United States was concerned, the European tourist market ITALY 63,000 50.4(') 457 was limited to those individuals earning the equivalent of 5,000 dollars or more per year. UNITED KINGDOM 891,000 52.6@) 1,020 Stated another way - because of the high transport- Total 1,981,875 ation costs between Europe and the United States, Only those Europeans with an income of 5,000 dollars Estimated from number of individuals paying income taxes by Per year or more could afford a trip to the United selected Income brackets. States. The study is of interest to the Tunisian tourist SOURCES: industry as obviously this entire economic group (1) Statistical Office of the United Nations. (2) Profit Potential in the Developing Countries. American Management represents a better tourist market for Tunisia than Association. the United States. This data is presented in Table 6. (3) The Statesman Yearbook, St. Martins Press. N.Y. (4) Promoting Travel to the United States. U.S. Travel Service. U.S. Depart- ment of Commerce. (1) Round trip, tourist class from Marseille to Tunis by sea. (5) Official Statistics of Sweden, Income and Property. (2) Round trip, tourist class from Copenhagen by air. (6) Demographic Yearbook. Statistical Office of the United Nations.

At the beginning of 1964, at the time of this invest- ment study, there were 27 (') first and second class hotels, motels or bungalows operating in Tunisia with a combined total of 1,317 rooms. However, 6 of these facilities having a total of 265 rooms were not in operating condition during the study year of 1962 (2). It should be noted that in 1964, 11 additional hotels, motels, and bungalows, with a combined capacity of approximately 743 rooms, are ready to receive tourists. It may be said that Tunisia's tourist sector for 1964 should have a total of 38 completed structures of first and second class quality with approximately 2,060 rooms to accommodate tourists. A review of Table 12, Tunisian Tourist Accommo- dations, and the map, Tunisian Tourist Attractions and Accommodations, will illustrate various elements of the geographic and physical setting for each hotel. An outstanding area for additional hotels is Hamma- met, where the five operating hotels have a combined capacity of 356 rooms. The tourist "overflow" in the Hammamet region in 1963 was sufficient to encourage the construction of 124 additional hotel rooms, and bungalows. Another outstanding area for future hotel investment is to be found on the Island of Djerba which can boast direct non-stop air transportation between Djerba and Paris. The island's four hotels with a combined total of 182 rooms will soon be supplemented by a new 1,000 room "Hotel City." The three older hotel operators plan to add an additional 43 rooms in 1964. Thus, the island will have a total of 225 rooms among its four hotels until such time as the 1,000 room "Hotel City" is developed. In its present state, the hotel industry of Tunisia is not in a position to meet the demand created by the influx of visitors which are expected in the coming years. A projection of the growth of indicates that 200,000 visitors will enter the country in 1967. This figure seems to be a conservative esti- mate in view of the rising incomes and longer vaca- tions of European people. The Tunisian Office of Tourism has projected a need of 135 hotels with a total of 5,500 rooms to accommodate an estimated 300,000 visitors in 1971. hotels In those European countries considered as being traditional tourist countries, the existing capacity for receiving the tourist at beach and sea-side resorts has been fully developed. Tunisia is in an excellent position to take advantage of Europe's tourist over- flow, and the European tourists' desire to vacation under the sun by the sea. A review of the statistical diagrams, showing Area Destinations Of Visitors Within Tunisia, By Season, graphically indicate that Tunisia's visitors prefer to vacation by the sea. Table 9, will illustrate the distribution of registration by nationality and by class of hotel together with the average length of stay. This information when studied with Table 10, Tunisian Hotel Costs Per Per- son, Per Day, will reveal the approximate sum of money individuals of various nationalities spend to meet hotel expenses during their stay.

(1) Selected second class hotels of h~ghqual~ty (2) Selected because of the ava~labll~tyof statlst~cs for an ent~reyear

H6tel Miramar - ~arnrnadLI

.-..: ::G: y~iAi~<...- vr +, To:ai Number cf Visiififi; tlli!lzing s3;;teis, ?,J~n:i-~ - r962, ,-,ne gra)n.]7, isial Nijmbcpf sf . . .?.i;.7qin v,t.. '.J:~jiors 3p5:]~ ji", Mcte{s, ~j\o~l-j5s ~tudi@d :&h the knowiecige that these rnonthiy :o?aIs ir:cii,& y&igciS tjtilizing at! rr:iasses of hot&, ;.e. first, secor:c, ~f~ij-.:! artd Fourth class stnicturos. Cue aa;wnt sfate ?'., . that ir! diiix3 "., 1982, approxinG?tellf 7,000 people r~&ierecf for n t~talof approximately 33,00C mom nigi'tia In the 2' firs? and sei::or~d chss hotsis thai ?$era operatloou at the time. The :;a[jje of ?he charts ..&ply i!lustrates the n;crntklg flueimtiort of visi:firs & ?hc> %i:'~,.ct this fl~ruajiofi$135 ljpcn :ne hot& i;1Cju3try, anr! t.iiE give some indication of tha average jengih af stay ifi 'Turrisia, which is ap?roxirr;atei): 451: rs 7 dfi)..~';. in !$@2, 58.755 \iisit~rsrt::clia{o:ad io;' a tojai gj 3f~,050 r,cen;. nights in 'l'misia's 22 fii% ar:c second class 5t;f$3: Sf t'~~Czrec,. The seusonai ij7terest display& in Tunisja by E~r.3- pesn viaitars rapresen% Tunisi;:'s biaaest.-. .- prohiem, as is ah~i:~e fsr mos: fmrisi areas thro\rgh the ~~rid. ii i.:. beiisved the! :rduo:tising, special t:ff-saassn ?.ate., .-,..;: to'1r$. ,..-. Zranc,porta2ion. etc,, will assist in "Iweiing- ,+. :: .+.,ne to;l;M-fb&f, thus b[i~lin&k!~OY ~2CJmirqthe :,?as~;7;3l ii~fiZio"r in hctsl registratiorr.

Table 12. Tunisian Tourist Accommodations (first and selected second class facilities) December, 1963

Map Index Name Location Class Rooms Beds year const 7 NO (1) -1 TUNIS HILTON Tunis 1 250 121 1964 2 TUNISIA PALACE Tun~s 1 95 --500 1903 3 MAJESTIC HOTEL Tunrs 1 98 - 184 1900 4 CLARIDGE Tun~s 1 83 106 1951 5 MAISON DOREE Tunis 2 55 109 - 6 ST. LOUIS Carthage - - - - 7 AMILCAR Amilcar 1 100 200 1964 8 ABOU NAWASS Gammarth 1 27 50 1963 3 9 DAR SAID 1 13 20 1949 10 HOTEL DES CHENES Ain Draham 2 19 38 1906 11 LE PETIT MOUSSE Bizerte 2 10 14 12 CORNICHE PALACE B~zerte 1 90 180 13 DAR FAIZA Djerba 2 27 50 14 AL DJAZIRA Dierba 1 58 110 15 LOTOS Djerba 2 19 38 1958 1 16 ULYSSE PALACE Djerba 1 78 176 1963-1964 17 FOURATI Hammamet 1 163 300 1959 18 MIRAMAR Hammamet 1 200 1955 h 19 LE GOLFE PLAGE Hammarnet 1 21 - 1963 20 HOTEL DU GOLFE Hammarnet 2 20 40 1956 21 PARC PLAGE HOTEL Hammamet 1 47 100 1964 1 22 SPLENDID Kairouan 2 43 75 1945 t 23 ESPLANADE Monastir 1 45 90 1962 -I, 24 RIBAT Monastir 1 47 94 1958 25 LES PALMIERS Skanes 1 41 82 19& 26 SKANES PALACE (DKHILA) S kanes 1 101 202 27 MABROUK Sfax 2 38 67 28 HOTEL DES OLlVlERS Sfax L 50 65 29 BOUJAFFAR Sousse 1 57 120 30 HADRUMET Sousse 1 47 70 3 1 HOTEL DES AGRICULTEURS Souk El Khemis 2 8 12 32 HOTEL DES MIMOSAS 1 25 - 1963-19649 33 HOTEL DE FRANCE Tabarka 2 19 25 -1goo_,, #- 34 HOTEL DE L'OASIS Tozeur 2 39 78 1960,?. 35 JUGURTHA PALACE 1 78 156 1963-19655 36 ClLLlUM 1 36 64 1963,!. 37 L'AUBERGE WAIN OKTEUR Korbus 1 26 52 1964 ,!, 38 LES HORTENSIAS Ain Draham 1 20 40 1963-1964 ,'. 39 BUNGALOWS DE L'ILE ZEMBRA Ile of Zembra 1 12 - 1963-1964,+. 10 AGHLABITES Karrouan 1 63 124 1965/!. I1 41 OASIS Gabes 1 - 174 1965 &

'I) To study exlslmg hotel locat~onssee map st end of text tunisia's tourist development programs The Tunisian Government is active in preserving the quality of its historical wealth and protecting its archeological treasures for future generations. A quasi-public organization, the ~0ciG.t~H6teliBre et Touristique de Tunisie (S.H.T.T.) owns and operates several hotels and is currently construct- ing others. These hotels are available for sale to private organizations. Tunisia maintains a number of coordinated well staffed tourist information and welcome centers throughout the country. These offices are super- vised by the National Office of Tourism, the same agency responsible for the well planned program of tourist publicity. When any region is subjected to an increase in tourist clientele, the character of local arts and crafts is usually profoundly modified to meet the increasing demand for the products. The Tunisian Arts Center realizes this threat to the character of traditional craft and assures that the essential quality of goods will be preserved. Managed by Comments The proposed ferry between Tunisia and Italy as I Hilton Intl. Under construction described in the section concerned with Invest- ,- Pr~vateForeign Not possible to expand ment Opportunities, the tax concessions, invest- ment guaranties and other factors described Pr~vateForeign Not possible to expand i- herein illustrate the Tunisian Government's con- Not possible to expand Private Tunisian tinuing search for new ways to improve the tourist Pr~vateFore~gn Not possible to expand sector of the economy. - Being re-constructed - Constructed by U.G.T.T. (labor union) opened in 1964 Tunisian tourism development is processing within a - Motel opened in 1963 framework of a Four-Year-Plan designed to: Private Foreign Not possible to expand - Provide employment - Improve foreign exchange balance S.H.T.T. Plans to add 10 rooms. Vacation area for - Balance the regional development of the country : Pr~vateTunislan Operating since June, 1963 - Encourage the modernization of facilities i S.H.T.T. Constructed by S.H.T.T. - opened in 1964 I Private Tun~sian Plans to add 10-20 rooms To achieve these objectives the Office of Tourism encourages development by: Private Tunisian Plans to add 23 rooms Establishment of additional regional tourist offices. I Private Tunisian - i S.H.T.T. Opening in 1964 Inventory tourist sites and attractions for National i Pr~vateTunis~an 28 additional rooms under construction protection. ! S.H.T.T. Rooms have been added since original construction Recommends legislation against the pollution of sea water. : Pr~vateTunisian 80 additional bungalows to be constructed in 66, opening in 64 Prrvate Foreign Plans to add 28 rooms in 1964 Cooperates with the Ministry of Cultural Affairs to Pr~vate Tunis~an Openinq In 1964 safeguard historical areas of the country. Prwate Tunisian Point for tourist in transit south Cooperates with the Ministry of Agriculture in the S.H.T.T. Opened in 1963 preservation of wild life. S.H.T.T. Rooms have been added since original construction Discourages speculation with non-State-owned S.H.T.T. Motel lands. S.H.T.T. Constructed by S.H.T.T. - openinq in 1964 Cooperates with the Ministry of Public Works in - SHTT - the establishment of access roads to tourist Sfax-Gafsa Co. - attractions. City of Sousse - Provides tourist planning services for communi- S.H.T.T. Under construction ties, e.g., lighting the gardens in Hammamet, Private Tunisian - providing golf courses, etc. Private Tunisian Under construction En'courages the construction of additional facilities - Private Foreign - for 4,500 beds. - S.H.T.T. - Establishes a form of building-code whereby new construction would conform to Tunisian style, ,S.H.T.T. Under construction by S.H.T.T. - opening in 1964 thereby complementing the tourist atmosphere of --S.N.T.C. (Paper Co.) - the country. ~H.T.T. Under construction - opening in 1964 Encouraging originality in projects of business- ,S.H.T.T. Under construction - opening in 1964 f men, such as accomodation in caves, under -- O~enin 1964 - (Navigation School) Bedouin tents, etc. Q.H.T.T. Under construction Encouraging the establishment of rest stops be- divate Tunisian Under construction tween tourist sites separated by great distances Sources: Tunisian Tourist Office, Societ6 Hateliere et Touristique de Tunisie (S.H.T.T.) and many more items too numerous to mention.

-- Table 13. Hammamet To Sicily Schedule Leave Hammamet 6:00 am - 12:OO pm Leave Marsala 9:00 am - 3:00 pm Arrive Marsala 8140 - 2:40 Arrive Harnrnamet 11 :40 - 5:40 By operating until 12:W midnight the Hammamet-Marsala route could be increased by 1 extra trip, making a total of 6 daily trips. This will increase the gross yearly profit by $601,900.Total gross profit $1,805,740. TUNISIAN COASTAL ROUTES South North Leave Hammamet 6:15 am - 9:00 am Leave Djerba - - 2:00 pm Arrive Monastir 7:15 - 10:OO Arrive Monastir - - 5:15 Leave Monastir - - 10:15 Leave Monastir 7:30 am - 5:30 Arrive Djerba - - 1 :30 prn Arrive Hammamet 8:30 - 6:30

Table 14. Time - Distance Origin Destination Distance (Nat. Mile) Time ------Marsala Sicily Hammamet 126 160 min. Hammamet Monastir 40 60 min. Monastir Djerba 158 200 rnin.

Table 15. Revenue Summary Based On 100°/~Load Factor

Route Fare (1) Trips Revenue Days (2) Revenue (3) Per Day Per Day Per Year Per Year Hammamet-Monastir $3.50 4 $1.260 322 $405,720 Monastir-Dierba 13.50 2 2.430 322 782,460

Total Revenue Daily Yearly One Boat Operation $3,690 $1,188,180 Investment Payoff Period (1) Based on a previous operation. (BEFORE TAXES) (2) A number of days during the year are lost due to maintenance and climatic 10 conditions. 2 dry-dockings per year are required for a period of 3 days each. 37 operating days are lost per year for the Tunisian coast run, 55 operating 8 days per year are estimated as a loss on the route to Sicily because of fog or significant wave height in excess of 6 feet. Total lost days are therefore estimated as 43 for coastal route and 61 for route to Sicily. 6 (3) Based on abbreviated year. 4

Table 16. Operating Cost Summary 2 One Boat Operation 0 Annual Utilization hod Foctor - Percent

Scheduled days per year 365 - - pp

Operating- days-. per year- 322 Rate of Investment Return Foilborne hours per year 31 88 ( BEFORE TAXES) Hullborne hours .~er vear. 193 Total operating hours per year 3381 Direct Operating Cost Per Year 1. Maintenance a) Hull, Foils, and Outfit $3,000 b) Routine 2.250 C) Cabin 3.380 d) Main Engine 52,300 e) Displacement Engine 500 fl Generator 1 1Rn g) Transmission 13,880 Loud Factor -Percent 2. Fuel and Oil a) Foilborne $1 93,800 Total Net Profit Over Ten Years b) Hullborne 890 3. Crew Cost 20,900 4. Insurance 17,000 5 Port Charges 15,000 Total Direct Operating Cost Per Year $324,080 Indirect Operating Cost Per Year 11% of Direct Cost $36,620 Total Operating Cost Per Year (without interest) $360,700 Annual Amortization Over Ten Years (including salvage value) $85,000 NOTE: Labor rates computed at 30% of U.S. labor rates. Fuel costs computed at $0.16 per U.S. gallon.

Load Factor -Percent

hcallcsn: Northern suburbs of Tunis. appvoximateiy I? miles irwn the center of Tunis. Sid: 8w Said is a ma!! village situateci zn a c!iff-top overiookrrq the Gulf cf Tunis {see imet or! n?Rp of Twisiar? Tourist Atfrsctionc,j.

Eaflmated &st: The U.S. dnllar equrvalent of 5253.006 whic?~inr;ludes all eq\iiprner~t. tesmtiore: Norti~ernsub:irbr af Tunis, apprcxm-tately 13 miles from the center of Tunis. Sire consists cf grsen open space beside the sea bhapad like an mphithsaiw (sea inset on zap of Tunisiarj 'I'owist At?ractisns) Pmje~t:A hcf8i consisting of 75 cnalstc,, wth a tcilal of 750 beds, restaurant, i~unge,ball-room, sw1trrni:ng pool, etc. &timat& cost: The US. doliar equii4sn? of $1.5 miliim, establishment of small industry -- ...... COMPAENTS ...... -......

Roman Styled Brorize, SiWr

Siiic Screw Priniir:g Framed

ctions nat ziv.vaiteDIa ......

ilable ?$-I museums

...... --- ......

-...... --.....:..... oman ins@ription base, nu dasign

...... -- ......

...... --..-...... -...... --

ptmto-electric sngraving

( ...... " ..... ' ...... -...... - ...... Wr~fi&pinstic To be said fo pamr,ts 9.i children

Piastif. and cb2h T:: be soic tr~ parer-ts oi chiidren ...... urjeled as Ccr2mi.c

very ijttle is pUrCt1 by to;lrlsts as X~W ......

...... _ ...... _- ...... general business and investment factors investment policy investment guaranties of the american Tunisia's need of foreign capital invest- ment is fully realized by Habib Bourg- government uiba, the first President of the Tunisian Republic. In his inaugural speech, Pres- American citizens or companies may ident Bourguiba made reference to obtain from the Agency for International private initiative and to foreign capital. Development, guaranties to protect their Regarding private initiative he stated: investments in Tunisia against the risks "The Plan we propose to establish in- of war, inconvertibility, expropriation or tends neither to eliminate, to neglect, confiscation. These guaranties, available nor to oppose private initiative. It will under an Investment Guaranty Program, tend to encourage and sustain it, inso- cover new investments such as equity far, as it may come within the frame- loans and licensing agreements. work, adapts itself to the rhythm, and Convertibility guaranties protect both follows the objectives of the Plan." transfers of earnings and repatriation of Touching on Tunisia's need for foreign capital. Expropriation guaranties provide (and international) capital to support the for dollar compensation in accordance plan, President Bourguiba said "We are with a predetermined formula. War-risk obliged to call on foreign capital to fi- guaranties protect against loss resulting nance large projects to be established from direct damage or destruction of within the framework of the development physical plant, equipment, and facilities of the economy." caused by war or enemy attack. To sum-up, Tunisia considers industrial and tourist development a vital need, realizes that the necessary capital can- summary of investment not be provided by local private sources alone, and is therefore endeavouring to incentives establish a coherent system of laws and regulations encouraging foreign private The legislative advantages that Tunisia capital in Tunisia. accords or has accorded to enterprises can be summarlzed as follows:

I. TAX ADVANTAGES FOR NEW tunisian government ENTERPRISE aid in financing H Five year exemption on business in- come tax - Letter of Establishment A Letter of Guarantee, when issued by 111, 4. the Tunisian Government, can enable H Carry-over of initial period deficit, any enterprise to obtain long or medium with deduction from subsequent pro- term credit needed for purchasing or fits - Letter of Establishment 111, 5. completing equipment procurement, or IFive to ten year exemption on the to physically establish the facility. flat business tax (Droit Fixe) - Letter The Government of Tunisia guarantees of Establishment 111, 6. loans contracted by the enterprise but H Exemption from the tax on profits does not, in principle, participate in di- from shares used to establish or ex- rect financing. This Government guar- pand a business, up to 6% per year antee is granted to those loans repay- of the nominal value of the shares - able within a 5 to 20 year period. Letter of Establishment 111, 8. A Letter of Agreement gives the holder H Ten year tax exemption on undistrib- the following advantage: uted reinvested profits - Letter of The possibility of resorting to credit Establishment 111, 4. of the "National Funds of Govern- ment Markets" for the purpose of Il. REASSURANCES insuring production financing. The H Unlimited repatriation of invested possibility of profit resulting from a capital - Letter of Establishment 111, 2 market guarantee at a minimum price (all inclusive paragraph). fixed by the letter. Unlimited repatriation of profits, div- idends and interest - Letter of Estab- IN ORDER TO PROFIT FROM THlS lishment 111, 2. ADVANTAGE, THE ENTERPRISE MUST Fifteen to twenty year guarantee ADDRESS A REQUEST TO THE against rise in taxes on profit, div- "SECRETARY OF STATE FOR THE idends and reserves - Letter of Estab- PLAN AND FINANCE." THIS AGREE- lishment 111, 2. MENT IS GRANTED BY DECREE AFTER Guarantee of convertibility - -etter FAVORABLE CONS1DERATION. of Establishment 111, 2. - W Guarantee against expropriation and merit and Finance, .Agency for !nier- nationalization - Letter of Establish- national Development Washington 25. ment 111, 2. D.C. The following information snould be included: Ill. FINANCIAL ASSISTANCE Name and address of the appl~cant, W Direct capital loans by semi-govern- the nature of his business organiza- mental institutions - Letter of Estab- tion (corporation, partnership, etc.), lishment 111, 2. the country in which he is incorpora- W Five to twenty year government guar- ted or organized, and the precise antee of long term bank loans, up nature of his affiliation with U.S. to 50% of the loan - Letter of Estab- business organizations. lishment Ill, 1. W The amount of the proposed loan should be indicated together with the IV. TARIFFS, IMPORT RESTRICTIONS, desired repayment period. A propos- ETC. ed schedule for the repayment of W Rebate or exemption on import duties the loan, together with a statement on initial equipment, machinery and showing the prospective sources and material - Letter of Establishment Ill, uses of the applicant's funds during 2. the period of repayment should be Protective against foreign man- included. ufactured goods - Letter of Establish- The general objectives or purposes of ment 111, 10. the proposed loan, including the amount W Fifteen to twenty year guarantee of products or services which would against rise in export duties - Law of result. If the activity would produce 2-10-58. items for export, an estimate of the val- ue of such exports and the probable V. OTHER ASSISTANCE markets should be included. Exemption from land and rental taxes The specific uses to be made of the Letter of Establishment 111, 7. proceeds of the proposed loan should - be described. If they are to finance the Accelerated depreciation write-off on procurement of fixed assets, breakdown plant and equipment - Letter of Es- such procurement by general categor- tablishment 111, 2. ies, land, buildings, machinery, equip- W Low water rates and land costs. ment, etc. Utilities brought to site of structure - If they are to provide working capital, Letter of Establishment 111, 9. breakdown into general purchases, such W Construction of access roads. as inventory, installment sales, or re- ceivables, refinancing, payrolls, general expenses, etc. The application should contain any per- tinent engineering (21 and economic financing data, and a statement of the benefits which the activity would yield to the Cooley Loans country in which it would be located. The total cost of the proposed activ- The Agency for International Develop- ity, the additional equity investment ment is authorized to make loans to contemplated, and the funds to be United States firms and their affili- borrowed from sources other than ates for undertakings that will de- the Agency for International Develop- velop business and expand trade in Tun- ment. This should include a state- isia. Cooley loans, as they are known, ment of the amount, source, and time will bear interest at rates similar to those of such other financing, the security charged for comparable loans made by provided, and the repayment terms. Tunisian banking institutions. Maturities The name and address of any pro- will be related to the purpose of the posed guarantor, together with an financing. Loans from this 2.0 million official or signed, current financial Dinar fund are made and repayed in statement of the guarantor should Tunisian Dinars (One = be provided. $1.90) and are commonly used to cover construction costs, procurement of lo- W The nature of the applicant's busi- cal building materials and supplies, as ness, including history, products, well as local operating expenses. markets, the identities of principal Any letter of application should be sub- owners, and an account of any gov- mitted to the Office of Capital Develop- ernmental participation, the most recent regularly prepared balance (1) An affiliate of a U.S. firm depends on a number of sheets, and profit and loss state- factors, such as its degree of ownership or control by (3). a US. firm, their common ownership by a third firm ments for the last three years and its general commercial and operating ties, corpor- ation partnership, or associations organized under the (2) In the case of hotels, architectural, plans of facilities laws of the United States, its States or territories are which the Socibtb Hateliere et Touristlque de la Tunisie considered US. firms. An individual who does business would like to see implemented are ava~lable. in the United States is a U.S. firm regardless of his (3) If proposed loan is guaranteed by another institution citizenship. the financial statement need only cover latest 12 months: If possible all financial statements sed at 15.4 per cent on all shares other should be audited, otherwise they than registered shares held by natural should be signed by an officer of the persons who pay 13.2 per cent. applicant. Indicate officers, directors, or partners 3 - Taxes that are paid directly by indi- of the applicant, with the percentage of viduals such as the personal Business ownership held by each, the names of Income Tax (Patente). banks with whom the applicant ordi- The Tax known as the patente tax, prob- narily does business. ably at its inception a license, is in A typical Cooley Loan for the equivalent Tunisia actually both a corporation in- of a half million dollars could bear inter- come tax when applied to corporate est at the rate of 6 per cent, repayable bodies and a business income tax when in Tunisian Dinars over a 20 year period applied to physical persons. with a 2 year grace period. It is assessable in two forms: the droit fixe and the droit proportionnel. Loans To Finance Foreign Exchange Costs Droit Fixe This tax consists of a flat rate payment The Societe Tunisienne de Banque subsequently deductible from the droit (STB) is able to extend subloans to proportionnel due for the same year. finance the dollar costs of equipment, supplies and services for industrial pro- It is paid when a business is established jects under a 5 million dollar A.I.D. De- and prorated to December 31, and on velopment Loan. This source of financ- January 1, of each succeeding year. The ing is restricted to private industrial basic annual rate assessable may run enterprises including tourism in Tunisia. from the U.S. dollar equivalent of $1.90 The subloans are made at 6 per cent, to $357.00 plus certain additional char- for periods of three to ten years and are ges as shown in the example given repayable in Tunisian Dinars. below. The flat rate payment is based on such factors as turnover, type and place of business and number of em- Loans To Finance Local Costs ployees; it is paid by both individuals Under a 2.4 million Dinar Special Re- and corporate bodies. volving Loan Fund established with A basic rate assessed at the U.S. dollar counterpart funds and US. Public Law equivalent of $286.00 would involve pay- 480 proceeds, the STB is able to extend ment of a total droit fixe of $402.00 as medium and long term loans to finance follows: the local costs of capital assets for industrial projects. The current in- Basic amount $286.00 terest rate is 5 per cent for periods Additional 1/10 to State budget 28.00 of up to ten years. The loan is made in Dinars and repayment is in Dinars. Gen- 15% to "collectivities locales" 43.00 erally, the firm receiving a loan should 5% to "Chambers Economique" 14.00 furnish a substantial part of the total investment from its own resources. Extraordinary contribution for Loans are made to private enterprises, national defense 31 .OO however, firms with Government parti- Total $402.00 cipation are not necessarily excluded. Nationality of the owners of the firm will not give rise to any discrimination. Droit Proportlonnel The proportional tax is assessed on the basis of annual net profits at the follow- taxes ing rates: Total Bas~c (~ncludlng Item (Percent) addit~onal Taxes may be roughly subdivided into declrnes) three groups: (Percent) 1 - Taxes payable by business firms, Single traders and such as the business income tax (pa- partnerships 15 20.4 tents) now assessed at a total overall Corporations 20 -30.4 rate of 30.4 per cent of net profits. Non-commercial 2 - Taxes paid by an enterprise in its Corp. 10 15.2 capacity as collection agent for the Gov- Non-commercial ernment, such as the tax on wages professions 15 20.4 (impbt sur les traitements et salaires) equal to 3 per cent of payroll, withheld Eighty per cent of the proportional tax by employers, and the tax on dividends is payable in the year of assessment in distributed to shareholders (impbt sur two equal installments. The patente is le revenu des valeurs mobilieres) asses- not deductible from operating expenses. Tax on Dividends, Interest, Bonuses SERVICE TAX - Tills iax 's 'eviee The tax on dividends, interest, and bo- on most services at the Daslc rate of 2.5 nuses (imp& sur le revenu des valeurs per cent, with some however at 1 pe: mobilieres) is paid by corporations in cent or 1.5 per cent. The exemptions to their capacity as collection agents for this tax may be studied in the Annex the Tunisian Government. It is assessed to the Official Order of Dec. 29, 1955, at the following basic rates plus an addi- modified by Official Order of March 9, tional tenth as an exceptional contribu- 1956, and by Law No. 62-77, December tion for national defense (CEDN): 14 31, 1962. The additional tenth for the per cent on dividends paid to share- CEDN is also paid on this tax. holders, interest paid to bondholders, bonuses paid to members of the Personal Income Tax board, and 12 per cent on income on The personal income tax is assessed on registered shares held by natural per- net individual income on a sliding scale sons, 14 per cent when held by corpor- and ranges from 1 to 40 per cent of net ate bodies. income. Incomes of the U.S. equivalent of $423. or below are exempt from this Tax on Salaries and Wages tax. The tax on salaries, wages, and pen- sions (imp6t sur les traitements, salai- Apprenticeship Tax res, et pensions) is assessed on incomes over $428. annually at a uniform rate of A professional training or apprenticeship 3 per cent. (The former rate was 5.5 per tax (taxe de formation professionnelle) cent on incomes over $357.). is assessed at the rate of 1 percent of total wages, salaries, allowances, and Turnover Taxes commissions paid by the employer. The turnover taxes (taxes sur le chiffre d'affaires) include a variety of indirect taxes, of which the three most important are the production tax (taxe a la pro- local rental tax duction), the consumption tax (taxe de consommation), and a service tax (taxe A tax is levied on hotels which is pay- sur les prestations de service). able to the municipality. This tax which is levied on all commercial or industrial PRODUCTION TAX The name of - structures is equal to 20 per cent of the this tax is misleading since it is turnover rental value. Such rental value is deter- tax on sales made by manufacturers or mined by the local tax office and de- producers, and on imports. In the case pends, in large measure, upon the loca- of imported goods, it is applicable in ... tion of the structure, its comparison addition to custom duties, on most with other similar structures and if the manufactured goods, irrespective of manager has a contract to operate the origin. The basic rate of the tax is 10 business for a silent owner. This 20 per per cent of the wholesale price in Tun- isia. In application it is similar to the taxe cent tax on rental value consists of a a la valeur ajoutee, assessed in France, 10 per cent rental tax and 10 per cent in that it is paid only once on any given general tax. The rental tax is the same article. It is unlike the personal property for all communities in Tunisia. tax in the United States paid each year on the assessed value. When the product taxed is the result of several operations executed by different tax concessions firms, each stage in the chain of pro- duction is subject to tax, but only on Enterprises that obtain Letters of Estab- the value added in any given stage. lishment (2) from the Tunisian Govern- Agricultural products are exempt from ment are entitled to certain tax con- this tax. When assessed on imported cessions or to certain advantages which goods, this tax is payable on importation tend to reduce taxes. These advantages and is computed on the landed cost at may include as specified in the indi- 11 per cent ad valorem when goods are vidual letter, all or part of the following: imported by producers, and 13 per cent by non-producers. 1. Application of a reduced business CONSUMPTION TAX - This is an income tax rate when the enterprise is additional tax assessed at basic rates of first organized and whenever there are 5, 10, or 15 per cent on a limited number increases in capital investment during the first 5 years. of products (I), less essential goods and luxury items pay the higher rates. The (1) As l~stedIn the decree of D3C. 29, 1955, amended by basic rates are subject to an additional official order March 31 1956, and further modifred by tenth (decime), extraordinary contribu- Law No. 62-77, ~ecernbbr31. 1962. and ofticlal order of Januarv- - - - , -22. , 1963. tion for national defense (CEDN). Total (2) Established by Act. of Sept. 18. 1946. and since amended a letter of establishment is granted for the assessment is thus: 16.5, 11, or 5.5 establishhent or expansion of those enterprises which per cent. contribute to the economic development Of Tunisia. 2. Exemption from the business income Table 18. Hourly Wage Rates tax during the first 5 years of activity. Approximate Legal This exemption may be extended for a Employment Class~flcat~on M~nlmumWage (Eauwalent further 5 years for any undistributed U S. '~oll~rsj profits reinvested in the enterprise. In Skilled labor 0.82 addition, the right, during an initial per- - Non classified labor 0.33 iod of at least 5 years, to carry deficits - over from year to year for the purpose 1st class labor 0.29 of deducting them from profits registered 2nd class labor 0.26 in a subsequent year, thus reducing taxes. Semi-skilled labor 0.23 Source Offlce of Work Inspection. 3. Exemption from tax on dividends, interest, and bonuses, which are nor- The work week consists of 6 working mally assessable on loans contracted to days of 8 hours each. Beginning on the establish or extend the business, or that 49th hour of the week, an overtime pay- tax assessable on that part of the profits ment is due at the rate of a 75 per cent distributed to shares issued for the same increase over the base wage. Addition- purpose, not to exceed annually 6 per ally, workers in the Tunis area earn a cent of the nominal value of these special premium of approximately $0.10 shares. per half day as a "presence bonus." Workers earn one day of paid vacation 4. Enterprises that build or have built for every 24 working days. living quarters for the use of their per- Wages for employees in the hotel in- sonnel are granted an exceptional rate dustry are indicated in the following of amortization which permits the enter- table. prise to write off 50 per cent of cost on completion of the building and the bal- ance in 10 years. Table 19. Average Monthly Basic Tunisian law has established a special Wage Rates For A Typical Tourist taxation system of long duration to be Hotel applied to enterprises that are judged to be important to the Tunisian economy. This new system assures such enter- prises, a tax stability for a maximum per- iod of 15 years with a possible 5 year Chef 154. 238. extension to cover the period of instal- Maitre d'h6tel 159. 190. lation or enlargement of the enterprise. Janitor 40. 62. Cleaners 38. employment and wage Valets 40. 62. regulations Washer 52. 62. The entry of foreign labor into Tunisia Carpenter 71. 85. is governed by a decree of February 20, Plumber 71. 85. 1930, amended November 5, 1959, which provides that any foreigner wishing to Electrician 71. 85. exercise a salaried or wage-earning Painter 71. 85. occupation in Tunisia must have a labor Source: Office of Work Inspection contract duly visaed by the Secretary of State for Social Affairs. This contract is Non-wage Costs valid for one year. Foreign business men who do not have the status of salaried The social security contributions of em- workers may freely enter Tunisia to ployers in the tourist sector have been organize any activity profitable to the estimated to amount to approximately economy of the country. 15 per cent of the employer's basic pay- The entry of skilled foreign workers is roll. Additionally, allowances are requir- particularly encouraged, and labor con- ed for each employee as indicated tracts and their renewals for this type below: The Contributions vary but are of labor are granted and renewed with- estimated as follows: out difficulty. Family Allowances 15% Minimum wage rates are fixed by two Paid Vacation 4.5% wage-fixing commissions, one for the northern zone of Tunisia and one for Accident Insurance varies with the southern zone. The following table type of employment indicates the prevailing hourly wage Apprenticeship tax 1O/o rates for several selected employment classifications in zone one which con- Utility Costs sists of the cities of Tunis, Bizerte, Sfax, and Sousse. Wage rates in all other Electric power, per month, for lig-l in- Tunisian cities (zone 2) are less than dustrial and hotel use is suppl!~, in those classified in zone one. Tunis and the suburbs at $.05 pe' 1.il0- watt-hour for the first 25 kilowatt-hours, Two taxes which are payable at the time at $.04 per kilowatt-hour for the next 25 of entry and which are assessed on all kilowatt-hours, and $.03 for each kilo- imports irrespectrve of orlgln are the watt-hour above 50. Any enterprise customs formality tax ana the produc- planning to operate in Tunisia should tion tax. The customs forma~~tytax ap- apply to the electric power company for plies at a uniform rate of 1.65 per cent special rates. Tunis city gas is supplied with a minimum assessment of approxl- on a monthly basis at $.I0 per cubic mately $.07 per metric ton. meter for the first 50 cubic meters, at The production tax is basically an as- approximately $.07 per cubic meter for sessment of 10 per cent of the selling quantities exceeding 100 cubic meters. price in Tunisia. In practice, this tax usu- Butane gas is available outside Tunis. ally is paid on entry at the rate of 14 Water for industrial use is purchased at per cent by non-producers and 11 per $.I0 per cubic meter. cent by producers. Certain products covered in specific lists are subject to an internal revenue tax import tariffs as or consumption tax payable on entry of the merchandise, in one of two forms, related to tourism the consumption custom duty (droits de consommation) or the consumption tax. Customs charges are computed on the The following ten examples of the duties value of the commodity. and taxes assessed on imports at the For the purpose of assessing ad valorem moment of entry are cited for the guid- import duties, the value to be declared ance of investors interested in hotel is the normal price of the merchandise construction. It should be noted that pursuant to a sale made under full com- preferential treatment has been granted petitive conditions by an independent to a wide range of French products. seller to a buyer at the time the customs A request directed to the Secretary of declaration is submitted and at the place State for the Plan and Finance request- of delivery to buyer at point of entry into ing a reduction, elimination, or rebate Tunisia. Dutiable value, therefore, is on these duties as they relate to pro- based on export value plus transporta- curement of materials required by any tion and other costs incurred in selling new organization supporting the tourist and delivering the goods at point of sector would receive favorable con- entry into Tunisia. Inland transportation sideration, such has been recently costs in Tunisia and taxes assessed in granted to private firm - Letter of Estab- Tunisia are not to be included. lishment 111, 2.

Table 20. Customs Charges On Selected Commodities Imported Into Tunisia

Contribu- Import Customs Produc- Consump- tion to Country Of Duties Formality tion TaxW tions Tax National Origin % Tax % % % Defense Tax %

Electric Wires France Other Countries France Lamps Other Countries France Airconditioning Other Countries Central Heating France 5 1.65 17 - - Elec. Equip. Other Countries 10

Glass windows France 5 1.65 14 - Other Countries 10 France 10 Televis~on 1.65 17 25 2.5 Other Countries 20 France 5 Hardware 1.65 14 25 2.5 Other Countries 10 France 0 Wood (raw) 1.65 14 25 2.5 Other Countr~es 5

France - Mattress 30 1.65 14 - Other Countries

Tableware. ~;'h~eCountries 30 1.65 15.5 15.5 1.5

Source Tunwan Customs Off~ce (1) Bas~callythls tax IS 10% of retall prlce. travellers coming from any other countries in. tourist custom fected. formalities Departure from Tunis: The International Certif- icate of Vaccination against smallpox is request- ed by the Italian and German Sanitary Control Passports and Visas from travellers coming from African countries. For nationals of: 1) FEDERAL REPUBLIC OF GERMANY, UNITED Vehicles Entry STATES OF AMERICA: Bicycles free. Valid passport, wrthout visa, for a stay not exceeding four months. Other vehicles: - Ownership card (grey card) 2) AUSTRIA, BELGIUM, DENMARK, FINLAND, GIBRALTAR, GREAT BRITAIN, HOLLAND, - National drivers' licence for French citizens IRELAND, ITALY, , NORWAY, - International licence for others PORTUGAL, PRINCIPALITY OF MONACO, - The "tryptique" is no longer requested SWEDEN, SWITZERLAND, , YUGO- - The Tunisian Customs grant to automobile SLAVIA: drivers a pink pass valid for six months. Valid passport, without visa, for a stay not Passengers coming to Tunisia by plane are exceedrng three months. authorized to import their cars, motorcycles, and 3) GREECE: other vehicles by ship and to declare them as Valid passport, without visa, for a stay not part of their luggage. If the vehicle is not the exceeding one month. visitor's property or if the visitor belongs to a 4) FOR ALL OTHER COUNTRIES: company, or to a firm legally established, it is Valid passport, with visa. necessary to present to the Customs Office a letter from the owner, duly certified by this In Transit country's authorities, authorizing his employ- Transit visa is not required for a stay not exceed- ment. ing 72 hours. The Frontler Customs issue a Insurance is compulsory. residence authorization rnstead of visa.

Crulses No visas are necessary for passengers of any nationality on board tourist cruisers making a currency exchange three-day stop in Tunisia, prov~dedthe list of regulations passengers w~shingto embark is communicated to the "Direction de la SOrete" e~ghtdays be- Tunisia, by virtue of the law No. 59-145 of fore the ship's arrival. November 5, 1959, as amended, has introduced Allowances controls on capital transfers. In her relations with other countries, Tunisia adheres to the ON ARRIVAL: (per person over 18 years of age) principle of prohibition of transfers. In practice, Travellers coming from this means that for foreign trade transactions Item Europe Other Countries and financial settlement with foreign countries Cigarettes 200 grams 1,000 it is necessary to obtain beforehand the author- Ciaars 50 arams 250 ization of the Tunisian authorities concerned. Tobacco 400 arams 2.000 However, for non-residents wishing to make cap- ital investments in Tunisia a preferential system Personal effects, personal jewellery not exceed- has been established. These persons may in ing 500 grams, per person, and usual portable principle transfer the product of a liquidation objects are exempt from duty for the duratlon or of the realization of the assets thus consti- of the stay. Also allowed are: cameras (1 per tuted, provided their investments serve a useful person), radios, and portable typewriters - port- purpose to the Tunisian economy. able musical instruments, 1 bicycle without mo- Travellers who, upon entering Tunisia, made a tor - binoculars - small camping articles. custom declaration, are permitted to re-export Departure the unused balance of the currency which they possessed upon entry. Importation and export- Customs formality tax amounting to approxi- ation of Tunisian Dinars (1 Dinar=$l.gO) in any mately $.07 per ton and fraction of ton of net form whatsoever, is prohibited. Tunisian resi- rough weight for each item declared at departure dents leavrng the country for purpose of tourism for most Tunisian handicrafts: leather, wood, are entitled to an annual amount of 30 Dinars cork, fabrics, carpets, clothes, local jewellery, ($57.00) in foreign currency. Money required to copperwork, ceramics, decorative objects. meet local expenses during one's stay in Tun- Sanitary Regulations isia is not re-exportable. An allowance of four Cholera - Yellow fever - Certificate of Vaccination Dinars Per day is hypothesized as reasonable required for members of a crew, and the trav- daily expense and deducted from the total ellers coming from a declared infected area. amount imported when figuring the maximum Smallpox - Certificate is requested only from amount re-exportable. American Tourist in Europe, L.J. Lickerish and G. Anderla, European Travel Commission, 1955 Basic Data on the Economy of Tunisia, U.S. Department of Commerce, Bureau of Foreign Commerce, November, 1959. Cap Bon, F. Guiller, M. Macary, M. Mestiri and F. Mir Djalali, Societe Centrale pour I'Equipement du Territoire and Direction du Tourisme. Djerba, E. Beaudouin and M. Baud Bovy, Societe Centrale pour I'Equipement du Territoire and Office National du Tourisme, 1960 2 volumes. Establishing a Business in Tunisia, U.S. Department of Commerce, Bureau of Foreign Commerce. Economic Yearbook of Tunisia, 1964, Tunisian Union of Industry and Commerce, Tunis. Gafsa Djerid, Nefzaoua, C.N. Douady and M. Mestiri, Societe Centrale pour I'Equipement du Territoire and Office National du Tourisme, 1962. Import Tariff System of Tunisia, U.S. Department of Commerce, Bureau of Foreign Commerce, May 1960. New York Herald Tribune, International Edition, September, 1963. Promoting Travel to the United States, U.S. Department of Commerce, Travel Service, bibliography and acknowledgements February, 1963. Report on Study of Economic Feasibility of Two Proposed Hotels in Tunis and Gammarth, Harris, Kerr, Forster and Company, Consultants, May 1961. Tourism in O.E.C.D. Member Countries, The Organization for Economic Cooperation and Development, 1963. Tunis et sa Region, C. Douady, F. Guillien, M. Macary, M. Mestiri, F. Mir Djalali, Societe Centrale pour I'Equipement du Territoire and Office National du Tourisme, 1962 Tunisia, Secretary of State for Information. Tunisia, National Tunisian Tourist Office.

Additional copies of this report may be obtained from: Societe Tunisienne de Banque Av. Habib Thameur, Tunis, Tunisia National Office of Tourism Av. Mohamed V, Tunis, Tunisia For tourism data: Director Office National du Tourisme Tunis, Tunisia For investment data: President Director General Societe Tunisienne de Banque 1, Avenue Habib Thameur, Tunis, Tunisia For hotel data: Director Societe HGteliere et Touristique de Tunisie, Tunis, Tunisia For additional information write or wire: Mr. Driss Guigua, Directeur du Tourisme Avenue Mohamed V, Tunis, Tunisia Mr. Azouz Mathari President Directeur General Societe Tunisienne de Banque Avenue Habib Thameur, Tunis, Tunisia

Published by: Societe Tunisienne de Banque and National Office of Tourism, Tunis, Tunisia

The Direction du Tourisme and the Societe Tunisienne de Banque wish to express their appreciation to WILLIAM H. STEWART Industry Division, United States Agency for International Develpment Mission to Tunisia, for his assistance and cooperation in the preparation of this study

Photographies: Abdelhamid Kahia and Direction du Tourisme designed by: Aldo de Sylva Printed in Italy by Christen, Rome

1 1 Editions Kahia Tunis - Grafica Roma