Seychelles issues Final Ruling on Expenses Deduction

Posted in Business and Economy at 6:09 pm by Robert Klien

The Seychelles Revenue Commission (SRC) has issued its final Public Ruling 2016-2 aimed to provide clarity as regards the methodology of calculating the additional special business tax deduction allowed for marketing and promotion expenditure.

The SRC confirmed that, in addition to their normal business tax deduction, certain businesses in the Seychelles are allowed a special deduction equal to 5% of their taxable business income or their actual expenditure on marketing and promotion, whichever is the lower.

The special deduction is allowed for the following list:

  • farming entities;
  • agriculture processors and exporters;
  • boat owners;
  • fishery processors;
  • hotels, guest houses and self-catering establishments;
  • cafes and restaurants;
  • domestic air transport service providers;
  • domestic ferry service providers;
  • boat or yacht charter companies;
  • car hire companies;
  • underwater dive and water sports operators;
  • travel agents, tour and/or tourist guides;
  • and gambling/casino operators.


Seychelles’ financial survey reveals more education is needed

Posted in Seychelles offshore jurisdiction at 6:03 pm by Robert Klien

In accordance with the Seychelles’ first financial literacy survey, the majority of people in Seychelles know about financial products and services and have access to them, but do not know about how to use and evaluate these services.

The findings of the baseline survey were presented by Abel Motsomi of FinMark Trust, an independent organisation based in South Africa, which carried out the survey along with the Central Bank of Seychelles (CBS) and the local Financial Services Authority.

The objective of the study which was recommended as part of the Financial Sector Development Implementation Plan was to measure and provide credible benchmarks on financial literacy and capability.

Beggita Vital, the Payment Systems officer at CBS, said 562 interviews were conducted on Mahe, Praslin and La Digue, the three most populated islands in Seychelles.

The study showed that 94% of the participants have transacted with a bank and most knew about financial products and services available and had access to them. However, they were not necessarily knowledgeable about how to evaluate and use these services.

“Another common complaint that we receive at CBS by customers is that they were not aware that as guarantor of a loan, they are responsible to repay the loan in the event of a default by the borrower and this also came out of the study,” Vital said.

Other findings show that 94% of the people interviewed had transacted with a bank, and 87% wanted to improve their financial situation while 46% did not have a plan of what to do.

On the need for financial information, 38% felt they wanted to know more including how to save, invest and budget. While 83% of the people interviewed knew how much they earned or received, only 14% kept track of how much they lend.

The results of the study will be used to develop a national strategy for financial education in Seychelles.


IMF evaluates Seychelles’ 2017 financial outlook as strong

Posted in Business and Economy, International Organisations at 5:56 pm by Robert Klien

According to an International Monetary Fund (IMF) official said, Economic growth for 2016 in Seychelles is projected to reach around 4.5% as a reflection of “vibrant tourist arrivals” and expanding credit to the private sector.

Wendell Samuel led an IMF team that came to conduct the 4th and 5th reviews under the Extended Fund Facility arrangement with Seychelles.

Samuel said that “macroeconomic performance has been robust in 2016” and that inflation has been negative since the beginning of 2016 largely due to the low prices of commodities and stable exchange rates.

Separately, the Bretton Woods institution has predicted the jurisdiction’s primary fiscal surplus to reach 3% of gross domestic product (GDP) this year due to the good economic performance of Seychelles. This is in spite of the impact of the various financial initiatives announced in the State of the Nation Address in February, including income tax cuts and increases in pensions and the minimum wage.

Looking on to 2017, Samuel said the growth outlook remains positive, largely due to foreign direct investment (FDI) in the tourism sector.

However, he cautioned that there might be downside risks to the outlook largely due to the external factors. According to him, “weaker than expected global growth can dampen tourism performance”.

Tourism is one of the 2 main sectors that the Seychelles’ economy relies on for foreign exchange earnings. So far, over 240,000 visitors have visited Seychelles in 2016, which is a 9% increase compared to 2015.

Poverty reduction was another topic discussed during the meetings. In a report made public in late 2015, the Seychelles National Bureau of Statistics said a poverty and equality survey carried out in 2013 placed the poverty line estimate at SCR 3,945 (around USD 300) per adult per month. The proportion of the population below the poverty line was then estimated at 39%. More progress on poverty reduction is needed to ensure that benefits of economic growth are shared by all.