Factor costs brochure - Invest in Tunisia, The Foreign Investment ...

PRODUCTION FACTOR COSTST U N I S I A- June 2008 -CONTENTSWAGESSOCIAL COSTSELECTRICITYNATURAL GASOIL BY-PRODUCTSTELECOMMUNICATIONSWATERSANITATION1

WAGESMinimum wages (starting 1 July 2008)The guaranteed interprofessional minimum wage (SMIG) and the guaranteed agriculturalminimum wage (SMAG) were introduced by decree n° 73‐247 of 26 May 1973. This wagelevel includes the 5 dinar transportation allowance introduced in July 1986 by decree n° 86‐691. The SMIG also includes a temporary additional indemnity, introduced by decree n°81‐437 of 7 April 1981 and increased by decree n°82‐501 of 16 March 1982.SMIG1SMIGMonthly wage Hourly wage40 hour work week 217.880 TD 1.257 TD48 hours work week 251.880 TD 1.211 TDSource:Decree n° 2008-2072 of 2 June 2008SMAGDaily wageSMAG 27.749 TDSpecialized workers 8.249 TD (includes a premium for technical skill : 500 millimes)Qualified workers 8.694 TD (includes a premium for technical skill : 945 millimes)Source:Decree n° 2008-2073 of 2 June 2008Payment for overtime :Overtime means any time spent at work above and beyond the duration of the normalworkweek. These hours are paid at a rate calculated by using the base hourly wagemultiplied by the following rates:1 SMIG (guaranteed interprofessional minimum wage in non-agricultural sectors).2 SMAG (guaranteed agricultural minimum wage).3

AgriculturalsectorWorking hoursbeyond thelength of thestandardworkdayPart time workFull time work at48 hours a weekNon agricultural sectorFull time work at less than 48 hours a week≤ 48 hours aweekBeyond this duration25% 50% 75% 25% 50%Source: Art. 90 of the Labor Code, 1998 Edition – Official Printing OfficeIncentives to boost employmentState assumption of a portion of the wages paid to newly recruited graduates of highereducation.• The State will take on for one year 50% of gross wages (up to 250 dinars a month) foreach recruitment of a young Tunisian who has signed up at an employment officeand who holds a diploma of higher education. This incentive has been extended toall sectors and all regions. (48th anniversary of the declaration of the Republic) TheState can also grant this benefit to young people who have taken part in an internshipto get started in professional life (SIVP1) or who have taken a recycling course underthe auspices of the national job fund 21‐21.• The National Job Fund 21‐21 will pay 75% of the wages of management/supervisorystaff who hold higher education diplomas, especially in fields where jobs are hard tofind. This support will date from their recruitment by businesses and will last threeyears. (48th anniversary of the declaration of the Republic).• 21‐21 will set up training programs for entrepreneurs in the field of maintenance oflab equipment and scientific research, working for university structures andindustrial companies (48th anniversary of the declaration of the Republic).4

- State assumption of a portion of the costs for professional internshipsType of internshipLevel of instructionfor eligible young peopleType ofestablishmentoffering the jobAvailable incentivesJob‐Trainingcontracts(CEF)‐ Must have completed at leastthree years of secondaryschool‐ Between the 3 rd and 7th yearof technical training‐ Holds a diploma from anagricultural training centerCompanies inall sectors‐Internship subsidized‐ Premium forrecruitment‐ 3 year exemption fromsocial costs‐ Fellowships set at 2/3of SMIGInternships forintroduction ofyoung people toprofessional life(SIVP 2)‐ Failure to pass at some pointbetween the 3rd year ofsecondary school and the 2 ndyear of post‐secondary studiesCompanies inall sectors‐ Fellowship paid bythe State‐ Social securitycovered for duration ofinternshipInternships forintroduction ofmanagement staffto professional life(SIVP 1)‐ Graduates of highereducationCompanies &administrations‐ Fellowship paid bythe State‐ State assumption ofsocial security costsduring the internshipCompanies in the private sector that hire staff in the framework of the program providing forcontracts to reinsert workers who have lost their jobs for economic or technological reasonsor following the definitive or sudden closing of a company without benefiting from themeasures provided for in the labor code can avail themselves of State assumption of costs forone year, as follows.• 50% of wages paid to the recruit, up to 200 dinars per month.• The employer’s share of contributions to the legal social security regime in line withwages paid to the recruit.Source: Law n° 2004-90 of 31 December 2004,5

SOCIAL COSTSContributionsCategoryCost of joining the NationalSocial Security structure(CNSS)Employer’s contribution toCNSSSpecial fund (to be paid toCNSS)Companies that donot export theirentire productionCompanies that exporttheir entire production5 TD 5 TD15.5% 15.5%0.5 ExemptVocational training tax (TFP) 1% ExemptFund for the Promotion ofSocial Housing (FOPROLOS)1% 1%TOTAL 18% 16.5%N.B. :‐ Each month, the employer automatically withholds the share to be paid by the staff member: 7.75% of wages.‐ Exemption from the requirement to contribute to the fund to promote low‐cost housing for wage earners, for thefirst five years starting from the effective start of activities tied to investment in tourism, industry, handicrafts, andcertain services in the second group of priority regional development zones and those being encouraged forpriority regional development (law n°2007‐69 of 27/12/2007)‐ Exemption of small scale businesses from the vocational training tax and from the contribution to the fund topromote housing for wage earners for the first three years starting from the effective start of activity (law n°2007‐69 of 27/12/2007).New health insurance system(Come into effect of the first phase of the reform since the 1 er July 2007, of the second and last phasethe 1 er July 2008).The new health insurance system is made up of a mandatory base and optional additionalfeatures.Contributions are set at 6.75%, broken down as follows:‐ 2.75% paid by the wage earner‐ 4% paid by the employerUpon retirement, the participant pays 4%. A decree sets the base to which this percentagewill be applied and the various stages in applying it.The basic system covers costs for health care services provided by both the public andprivate sectors. Management of the system is handled by a new structure: the NationalHealth Insurance Authority (CNAM). Management of optional additional features ishandled by insurance and mutual companies.Sources: ‐ Law n°2004‐ 71 of 2 August 2004 (JORT n° 63 of 6 August 2004 ‐ Pages 2228 ‐ 2230)CNSS & CNRPS.6

State assumption of the employer’s share of contributions to the socialsecurity system• Recruitment of new Tunisianstaff who hold a diploma ofhigher education earned after aminimum of two years ofstudies after the baccalaureateor an equivalent diploma,starting from the date aneligible candidate is recruitedfor the first time• Newly formed teams to backup the first team, at industrialcompanies that do not workaround the clockEncouraging regionaldevelopment:* Eligible sectors are industry,handicrafts and certain serviceactivitiesRates for State assumption of contributionsFor a period of 7 years, the rate for State assumption of aportion of these contributions is set as follows:Year relating to Stateassumption of contributions,starting fromthe date of recruitmentPortioncoveredby theState1st and 2 nd years 100%3rd year 85%4th year 70%5th year 55%6th year 40%7th year 25%This incentive is available for new recruitments made between 1January 2005 and 31 December 2009.(Art. 25 of the Investment Incentives Code & law n°2004‐90 of31 December 2004, which provides the legal basis for the 2005budget)• 50% for five years• (Art. 43 of the Investment Incentives Code)• For the first group, the rate of assumption by the State for the firstfive years starting from effective start up of activity is set asfollows:Year of State assumptionShare of State assumption* Lists of groups of regionaldevelopment zones are set bydecree* For zones being encouraged forregional development in tourism:assumption by the State for thefirst five years starting fromeffective start up of activityInvestments in Saharan tourismin zones being encouraged forregional development are eligiblefor this incentive for anadditional period of five yearsFirst year 100%Second year 80%Third year 60%Fourth year 40%Fifth year 20%• For the second group, State assumption of the contribution for thefirst five years, starting from effective start up of activity• For zones being encouraged for priority regional development,State assumption for the first five years, starting from the date ofeffective start up of activity and of a share of this contribution foran additional period of five years, set as follows :7

Year of State assumptionShare of State assumptionFirst year 80%Second year 65%Third year 50%Fourth year 35%Fifth year 20%These terms apply to initiatives for which eligibility for an additionalperiod of five years goes into effect before 31 December 2011.• Incentives for new promoters(Article 25 of the investment incentives code and law n°2004‐90 of 31 December2004, constituting the 2005 finance law)100% for a period of 5 years(Art. 45 of the Investment Incentives Code)8

ELECTRICITYCharacteristicsFrequency of AC50 HzLow voltage (1st category) 220/380 V (± 10%)Medium voltage (2 nd category)30 kV (± 7%) in general(10 kV and 17 kV in some regions)Rates for electricity (taxes not included)(Effective 1 April 2008)Level of high voltageCategorySubscrMill/subscr-monthRates (1) (1) (4)Price of energy(millimes/kWh)PowerMill/kW-monthD P E N4 periods of the day ‐ 3000 83 133 106 653 periods of the day ‐ 3000 96 126 NA 65Back‐up ‐ 1 250 98 146 117 68Level of medium voltageCategoryUniform4 periods of the dayPumping of waterAgricultural usePumping for agricultureBack‐upRates (1) Price of energy (1) (4)(millimes/kWh)Subscr PowerD P E NMill/subscr-month Mill/kW-months‐ 500 (3) 106‐ 3 500 85 142 115 68‐ 3 500 100 134 NA 68‐ ‐ 85 Cut‐off 115 68‐ ‐ 85 Cut‐off NA 68‐ 2000 105 153 122 739

Level of low voltageCategorySubscrMill/subscrmonthsRates (1) Price of energy(1) (4)(mill/kWh)PuissanceMill/kW-monthsD P E NInexpensive rate (5)(1 and 2 kVA & ≤ 50 kwh/month)‐ 200 (3) 74Inexpensiverate (5) (1and 2 kVA)1 to 50 kWh/month ‐ 200 (3) 9051 kWh /month and more ‐ 200 (3) 131Normal rate1 to 300 kWh /month andmore‐ 200 (3) 131(> 2 kVA) 301 kWh /month andmore‐ 200 (3) 157Public lighting ‐ 500 (3) 130Water heating 500 ‐ 127 Cut‐off 127Heating & AC (2) ‐ 200 (3) 157IrrigationUniform (2) 300 200 (3) 913 periods of the day 1000 ‐ 76 131 NA 68ABBREVIATIONS:Mill = Tunisian millimesVAT = Value Added TaxNA = Not ApplicableSubscr = SubscriptionD = DaytimeP = PeakE = EveningN = Nighttime(1) VAT will be applied as follows:• 18% on fees and energy prices (exclusive of tax) for use other than household and irrigation• 12% for low voltage electricity for household use and medium/low voltage electricity for water pumping operations foragricultural irrigation (decree n°2007-2 of 3 January 2007)(2) These rates are no longer used(3) mill/kava-month(4) To be increased to include the special municipal tax: 3 mill/kWh(5) Up to consumption of 50 kWh/month above the normal categorySource: Tunisian Electricity and Gas Company (STEG), 1 July 200710

NATURAL GASStructure providing servicesSTEG : Tunisian Electricity and Gas CompanyStructure of the new price schedule for gas• A BP1 rate for households and small service businesses as well as low pressureindustrial customers• A BP2 rate for major service and industrial concerns using low pressure gas• The price schedule also posts two rates for medium pressure (MP1 et MP2), which werepreviously grouped together under just one MP rate. This breakdown was introducedto distinguish between large‐scale users of MP with debit of 6000 th/h or more fromother MP users.Abbreviations: TD = Tunisian dinar / mill = Tunisian millime / Th = thermie / h = hourLowpressureLevel of pressureBP1Category of subscribed debit(th/h)50and100C * ≤ 300 th/month(≤ 30 m 3 /month)Chargesexclusive of VATSubscriptionTND/monthDebitMill/thh‐monthEnergy pricesSubscriptionTND/monthDebitMill/th‐hmonth21,76 2073300 600 th/monthC > 60 m 3 /month24,48 233BP2 160 to ≤ 8 000 ‐ 20 23,25 221MediumpressureMP1 1 000 to 4 000 20 100 21,20 ‐MP2 6 000 to 30 000 20 200 20,87 ‐HP1 10 000 to 30 000 300 400 20,00 ‐HighpressureHP20 ‐ 2000TOE/month> 2000TOE/month> 30 000 300 40020,000,1F‐4,3571 (2)26,00‐(*) C=Consumption; TOE=Ton of Oil Equivalent(2) F being the price in dinars (exclusive of tax) of a ton of n°2 heavy fuel delivered in bulk to any user whoseconsumption at a single plant is equal or superior to 10,000 metric tons a year.11

Source: STEG – 1 April 2008Useful addressesSTEGTunisian Electricity and Gas Company38 rue Kamel AtaturkPO Box 190 Tunis 1080 CedexTel. : +216 71 341 311Fax : +216 71 349 981email : DPSC@steg.com.tnwebsite : www.steg.com.tn12

OIL BY PRODUCTSRates for oil-based products(starting 2 nd March 2008)Selling prices to the publicUnleaded premium petrolPremium petrolRegular petrolKeroseneDieselHeavy fuel oil n° 2Liquefied petrol gas (LPG) for non domestic use1250 millimes/liter1250 millimes/liter1070 millimes/liter690 millimes/liter890 millimes/liter340.000 dinars/ton966.750 dinars/tonSource : Ministry of Industry, Energy and Small BusinessesNB: The rate for value added tax is reduced to 12% for the following products:‐ paraffin oil‐ gas oil‐ domestic fuel (light and heavy)‐ petrol, propane and butane gas processed in bottles weighing no more than 13 kilograms‐ petrol, propane and butane gas in bulk or processed in bottle weighing no more than 13 kilograms.Source: Decree n° 2008‐1 of 2 January 2008Useful addressesMinistry of Industry, Energy and Small BusinessesDirectorate General for Energy17 avenue Kheireddine Pacha1002 Tunis‐BelvedereTel: +216 71 780 370Fax: +216 71 787 80413

TELECOMMUNICATIONSStructure providing servicesNational Telecommunications AgencySubmission of applications: commercial offices of Tunisie Telecom.Kinds of subscriptions: Telephone, fax, telex, mobile phone (RTM or GSM), data transmission andRNIS lines.For more information, consult Tunisie Telecom’s website:www.tunisietelecom.tnUseful addressesMinistry of Communication Technologies3 bis rue dʹAngleterre1000 RP ‐ TunisTel. : +216 71 359 000Fax : +216 71 328 114email : communications@ministeres.tnwebsite : www.infocom.tnTunisie‐Telecom commercial agencyRue Astrubal1002 Tunis‐BelvedereTel. : (216) 71 801 717Fax : (216) 71 800 777e‐mail : actel.virtuelle@ttnet.tnweb : www.tunisietelecom.tnTunisianaLes Jardins du Lac‐1053Les Berges du Lac‐TunisBP n° 641, 1080 Tunis CedexTél : (216) 22 12 00 00Fax: (216) 22 12 10 09web : www.tunisiana.comATITunisian Internet Agency13 rue Jughurta, Mutuelleville1002 Tunis‐BelvedereTel: +216 71 846 100Fax: +216 71 846 600email: commercial@ati.tnwebsite: www.ati.tn14

Private Internet service providersPlanet TunisieImmeuble Astree43 avenue Kheireddine Pacha1002 Tunis‐BelvedereTel: +216 71 847 373Fax: +216 71 840 930email: commercial@planet.tnwebsite: www.planet.tn3S Globalnet30 rue Mosbah Jarbou2092 Tunis-Manar IITel: +216 71 872 000Fax: +216 71 886 504email: sales.3s.@gnet.tnwebsite: www.gnet.tnHexabyte Internet Group4, rue Ibn Bessam, Menzah 4, 1004 TunisTél: (216) 71 232 000 ‐ 71 23 53 00 ‐ 78 45 66 66Fax : (216) 71 75 13 00e‐mail : info@hexabyte.tnweb : www.hexabyte.tnTopnetImm Pacha Centre, Bloc B, 1er étage,75 avenue Kheireddine Pacha 1073 TunisTél : (216) 71 770 770Fax : (216) 71 951 031e‐mail : commercial@topnet.tnweb : www.topnet.tnTunet16, Rue de Syrie Bloc C, 1001 TunisTel : (216) 71 835235Fax: (216) 71 831643web : www.tunet.tn15

DRINKING WATERInstitution providing servicesSONEDE, the national water exploitation and distribution company‐ Submission of requests: at the SONEDE office in the district where the project is located.ConsumptionIndustrial useTourism useQuarterly industrial consumption TND/m 3 TND/m 320 m 3 or less 0.140Hotel industry 0.840More than 20 up to 40 m 3 0.240More than 40 m 3 , up to 70 m 3 0.300More than 70 m 3, up to 150 m 3 0.545More than 150 m 3 0.840Source: Decree issued by the ministers of finance and agriculture/hydraulic resources on 18 June 2005setting the price of drinking water (Official Journal of the Tunisian Republic n°50 of 24 June 2005).RatesVAT: 18 %Maintenance of pipes (in TND)Diameter of pipes (by quarter)15 mm or less 3.30020 mm 5.83030 mm 10.74040 mm 20.57060 mm 53.46080 mm 53.460100 mm 82.810150 mm 220.670Source: Decree issued by the ministers of finance and agriculturein June 2003, setting the posted rates for subscribers to drinkingwater16

Useful addressesSONEDENational Water Exploitation and Distribution CompanyAvenue Slimen Ben SlimenEl Manar 2, Tunis 2092Tel.: +216 71 887 000Fax: +216 71 871 000Email: commuson@gnet.tnWebsite: www.sonede.com.tn17

SANITATIONStructure providing serviceONAS : National Sanitation Authority‐ Submission of applications: ONAS offices in the district where the project is locatedSanitation fees by quarterRates(exclusive of VAT)Tourism useGeneralIndustries that pre‐treat orotherwise purify wasteIndustries with highlypolluting effluentsindustrial useCharacteristics of wasteabsence of toxicsubstancesBDO after 5 days 1000 mg per literBDO after 5 days >400mg/literConnected topublic network7.880 TND+0.692TND/m 3Not connected topublic network7.880 TND + 0.521TND/m 3 ‐7.880 TND + 0.814 7.880 TND + 0.521TND/m 3 TND/m 37.880 TND +0.979 TND/m 3 ofwater consumedIncentive measures in the field of sanitation‐ Reduction by 50% of the sanitation tax for textile companies that have facilities for pretreatingwaste water and that meet the standards for connection to the sanitation grid(Ministerial Council of 14 January 2000)‐ Possibility extended to industrial and tourism companies to pay for hook‐up in severalinstallments. This measure allows companies to pay this cost over 8 years instead of all atonce. (Ministerial Council of 20 December 2000)Useful addressesONASNational Sanitation Authority32 rue Hedi Nouira1001 TunisTel: +216 71 343 200Fax: +216 71 350 411website: www.onas.nat.tn18