07.24.17

Seychelles urged to hike Taxes on Tourism Services Firms

Posted in Business and Economy, International Organisations, Seychelles government at 7:08 pm by Robert Klien

According to the International Monetary Fund (IMF), Seychelles has scope to further increase its tax revenue despite already having a relatively high tax-to-GDP ratio.

The IMF said that while Seychelles collects more in tax than other tourism-dependent island countries, its business tax-to-GDP ratio has been hovering around 4.25-5.5%, down from a peak at 7.1% in 2011. It noted that the jurisdiction should limit tax incentives for tourism-related companies, saying that the policies including taxing businesses in the sector at a rate of 15%, compared with 30% to 33% for other companies, had reduced tax collections by 0.5% of GDP.

Elsewhere the IMF welcomed the country’s plans for a property tax but said that it should be “non-discriminatory and should minimize distortions.” Seychelles is also considering the introduction of a sugar tax in its November budget and has delayed the introduction of a progressive personal income tax until January 1, 2018.

Significant reforms were announced in Seychelles in December 2016 Budget. They included the introduction of a new property tax will be introduced on land ownership in Seychelles, to be levied only on foreigners, and purchases of private land by foreigners will also attract a high stamp duty. Also, there were comprehensive changes proposed covering the personal and corporate income tax regimes.

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