09.22.18

Habib Bank to close its business in Seychelles

Posted in Business and Economy, Seychelles banking at 6:28 pm by Robert Klien

 

As the regulator of the country’s banking system, the Central Bank of Seychelles (CBS) has reassured all clients of the Habib Bank Limited (HBL) that the bank has sufficient liquidity to fulfill its obligation towards all depositors and repay all debts.

This statement was made by CBS Governor Caroline Abel on September 21 during a press conference at the CBS boardroom, after announcing that the HBL had formally requested to close down its business in Seychelles.

The request dated and received by CBS on Monday September 10, 2018, was subsequently approved by the CBS Board on Thursday September 20, 2018, in accordance with Schedule 5 of the Financial Institutions Act, 2004.

The decision has already been communicated to HBL, while the notice shall also be submitted to the Registrar of Companies.

According to the management of the HBL, the decision to close down the business after years of operation is based on the strategic reorganisation aimed at increasing focus on its core markets.

Ms Abel explained that while HBL shall not be accepting any new business as of yesterday, following the CBS approval to close down its business, there is a clear process that the bank needs to undertake as part of its winding up. This includes repaying all of its depositors and other creditors in respect of its operations in Seychelles.

 

The HBL Seychelles branch was opened in 1976 and up to now, it has 1870 accounts, totalling to a sum of R96,512,461.65.

07.31.18

Seychelles’ Electoral Commission to audit political parties for monitoring funds usage

Posted in Business and Economy, Seychelles government at 5:17 pm by Robert Klien

The Seychelles’ Electoral Commission plans to audit the expenses of political parties that received funds for their activities.

According to the interim electoral commissioner, Bernard Elisabeth, political parties receive money every quarter depending on the number of seats they have in the National Assembly. “The money is disbursed every 3months in a year to ensure that a follow up is done by the Commission. Some political parties are even receiving 800,000 rupees every 3 months,” he said. There are 11 parties registered with the Electoral Commission. Some of them are not active but are still receiving funds and they need to be accountable for their expenses.

He added that as of now “all political parties receiving funds from the Commission need to submit an auditor’s report with details of all their expanses including a list of their executive members each year.”

According to the Electoral Commission, SCR 6.5 million is budgeted under the consolidated fund to share between political parties based on the number of valid votes gained in the previous election.

In accordance with the current voter’s register, around 63,000 people are eligible to vote out of the 93,000 people residing in Seychelles. Presidential and Parliamentary elections are held every 5 years in Seychelles. In the last Presidential election in December 2015 the candidate of the ruling Parti Lepep, James Michel, obtained 50.15%.

 

07.25.18

New Legislation in Seychelles to improve transparency, speed for overseas healthcare

Posted in Business and Economy, Seychelles legislation at 5:22 pm by Robert Klien

Legislation to fast-track decisions on who is eligible for government-funded treatment in other countries is now in force after the President of Seychelles, Danny Faure, signed the Overseas Treatment Act.

According to the Minister of Health, Jean-Paul Adam, the new legislation highlights the way in which any citizen of Seychelles can have access to overseas treatment. The new rules outline the procedures which the specialists within the Seychelles hospital can refer somebody for overseas treatment. Also, it represents the rights of the citizen as regards accessing that treatment.

Adam added that although more and more specialised treatment is being done locally there remains certain procedures by specialists that are not available in Seychelles. It is for that reason that the Ministry of Health is continuing to support a programme of sending patients overseas when necessary.

The government of Seychelles is currently sending over 200 patients per year for specialised overseas treatment not provided in the jurisdiction.

With the aim of making the procedures more transparent, a bill proposed by the Ministry of Health was approved by the Cabinet of Ministers in March and approved by the National Assembly last month.

 

06.26.18

Seychelles Introduces Progressive PIT Regime

Posted in Business and Economy at 5:09 pm by Robert Klien

A new progressive income tax system for individuals was introduced in the Seychelles on June 1, 2018.

For citizens only, the first SCR8,555.50 (USD629) of taxable income is exempt from income tax. A 15% rate applies on income up to SCR10,000, starting from the first rupee earned for non-citizens. Income up to SCR83,333 is subject to a 20% rate and a 30% applies on income above that threshold.

In order to support taxpayers and employers when calculating income tax liability, a calculator has been released by the Seychelles Revenue Commission (SRC).

Subject to conditions set out in the second schedule of the Income and Non-Monetary Benefit Tax Act, the following payments are not taxable income under the new regime:

  • an emolument derived by a person entitled to privileges under the Privileges and Immunities Act;
  • an emolument being a reimbursement for the use of a motor vehicle;
  • an emolument being a reimbursement by an employer of an employed person for the cost of using the employee’s own motor vehicle for the benefit of the employer;
  • day-to-day living expenses for traveling workers (per diem);
  • a retirement pension;
  • payments for overtime; end of contract payments;
  • a uniform/shoe allowance;
  • a bonus;
  • compensation;
  • a service charge;
  • a gratuity payment;
  • and a 13th-month payment.

Compliance obligations have changed since the introduction of the regime. A new payroll form has been designed and the monthly Business Activity Statement (BAS) has been updated.

According to the SRC, the two forms must be lodged within 21 days following the end of the applicable month. The payroll form has been developed to assist employers with the calculation of their monthly income tax withholding obligations.

For employers with fewer than 10 employees, the payroll statement can be lodged either manually or electronically using the SRC’s E-Service facility. For employers with 10 or more employees – only electronically.

Firms must also lodge an employee status report. The first deadline is July 21, along with the payroll statement. After this first deadline, the employee status report should be updated and submitted on January 21 every year.

04.11.18

Seychelles advised to redouble BEPS efforts

Posted in Business and Economy, Double Taxation Agreements, International Organisations, International relations at 8:06 pm by Robert Klien

The Seychelles has been told to deploy more resources to implement recommendations from the OECD on base erosion and profit shifting.

Ingela Willfors, a UN tax expert from the Swedish Ministry of Finance, held discussions on implementation with the Seychelles’ Minister of Finance, Trade, and Economic Planning and in particular on revising the territory’s double tax agreements (DTAs) through the BEPS multilateral instrument to implement tax treaty-related measures to prevent BEPS.

Following an earlier 5-day visit, Willfors identified that Seychelles currently lacks the resources and capacity to effectively implement the OECD’s recommendations. She recommended that authorities focus on those measures that must be implemented to meet international best standards – namely the BEPS minimum standards, on preventing treaty abuse, the introduction of country-by-country reporting rules, improving dispute resolution mechanisms, and tackling harmful tax practices.

The Seychelles has for the past 2years received support from Sweden on BEPS, as part of a twinning program.

01.20.18

Seychelles to chair AML meeting to address “grey-list”issues

Posted in Business and Economy, International Organisations, International relations, Seychelles government at 8:41 pm by Robert Klien

Seychelles is gearing up to hold this year’s Eastern and Southern Africa Anti-Money Laundering (AML) Group meeting in August while also preparing to take up the presidency of the group, the jurisdiction’s finance minister said.

To prepare for the high-level meeting, Seychelles’ Ministry of Finance is holding frequent meetings with all involved parties to ensure the event goes smoothly from start to finish.

Peter Larose, the Minister for Finance, Trade and Economic Planning, said: “It is important that we plan ahead. I had to call on a number of parties to be able to assist as this is about Seychelles. We need to showcase Seychelles’ style of management, governance system and show the world that we are a capable, responsible and accountable government”.

According to him, the guests will have the opportunity to witness the competitive edge of Seychelles as part of the global village.

Minister said that discussions in this year’s meeting will focus on our compliance with international best practices including preventing money-laundering, tax evasion and combatting the financing of terrorism. “It is part and parcel of our commitment to share information within the group and Africa, and with the rest of the world,” said Larose.

The aim of the group is to combat anti-money laundering by implementing recommendations of the Financial Action Task Force on Money Laundering (FATF). The organisation sets standards and promotes effective application of AML legal and regulatory measures.

01.17.18

Seychelles and Abu Dhabi leaders meet at World Future Energy Summit

Posted in Business and Economy, Diplomatic missions, International relations at 9:44 pm by Robert Klien

The president of Seychelles, Danny Faure, met with Sheikh Mohammed bin Zayed, crown prince of Abu Dhabi, on the sidelines of the World Future Energy Summit this week.

The two leaders discussed how to maintain friendly relations and support between the two jurisdictions.

On January 15, President Faure attended the official opening of the Abu Dhabi Sustainability Week being held under the theme “Driving the Global Energy Transformation.”

The head of state of Seychelles is attending the World Future Energy Summit for the 2nd time in his presidency.

The event is a global discussion on the future of renewable energy, clean technology and sustainability and is held every year as part of Abu Dhabi Sustainability Week. This year, the summit will cover burning issues and key trends in the renewable energy sector, such as the future of energy and transport in urban.

01.10.18

Seychelles increases Import Duties on certain building materials

Posted in Business and Economy, Seychelles legislation at 9:24 pm by Robert Klien

Effective January 1, 2018, import duty was removed in the Seychelles on dietary supplements, corrugated iron sheets, and various other building materials, including panels, tiles, and other similar materials.

According to the tax agency, VAT will still apply on the aforementioned items, at a 15% rate.

The changes were included in Statutory Instrument 68 of 2017, Customs Management (Tariff and Classification of Goods) (Amendment) No 2 Regulations, 2017.

01.02.18

Tax Law changes approved in Seychelles

Posted in Business and Economy, Seychelles government, Seychelles legislation, Seychelles offshore jurisdiction at 8:33 pm by Robert Klien

At an extraordinary meeting of the Seychelles Cabinet in December, a number of legal and tax policy proposals were approved, continuing the jurisdiction’s progress in reforming its tax regime and bolstering its economy.

According to a Ministry of Finance statement that was released following the meeting: “Cabinet approved policies relating to the Progressive Income Tax Law. The aim of these policies are to simplify income tax collection. Cabinet also approved the amendment to the Excise Tax Bill. The amendments would harmonize the categories of business and persons entitled to fuel concessions under the Excise Tax Act 2009.”

Also, administrative changes were approved to the Seychelles Revenue Commission Act and the Customs Management Bill with a view to allow for the renaming of certain posts, as well as to allow for the creation of a Revenue Commission Board.

On December 13, 2017, the Executive Board of the International Monetary Fund (IMF) approved a new Policy Coordination Instrument (PCI) for Seychelles. The 3-year arrangement with the IMF will allow the Government of the Seychelles to receive intensive support with regard to developing and implementing pro-growth economic policies.

The previous review of the economy held by the IMF in October 2017 said that while the Seychelles has made remarkable progress on enhancing its finance and economy, it still faces vulnerabilities and pressures, as a small island economy in a challenging global economic environment.

11.26.17

Tax settings overhauled in recent Seychelles’ 2018 Budget

Posted in Business and Economy, Seychelles legislation, Seychelles offshore jurisdiction, Tourism industry at 8:39 pm by Robert Klien

The Seychelles Budget included numerous proposals to change the jurisdiction’s tax settings, including new corporate tax reliefs and the settings for a progressive personal income tax regime.

According to the Government of Seychelles, its proposals for a progressive income tax will mark the 3rd phase of reform efforts that began in April 2016, with the introduction of a higher personal income tax exemption, for those earning less than SCR8,555 (USD618) a month.

Under the new changes, the threshold will remain the same, but income up to SCR10,000 will be subject to a 15% rate; income up to SCR83,333 will be subject to a 20% rate, and a 30% rate will be levied on income above that threshold. Foreign individuals will not benefit from the tax exempt threshold which will be applicable on a monthly basis, in a move said to be to reduce the tax compliance burden.

Also, an alternative for small businesses from being taxed under the business tax regime was proposed. They can be subject instead to a flat fee of SCR3,000, for businesses with a turnover of not more than SCR500,000; or a flat percentage of 3% for those businesses with turnover between SCR500,000 and SCR25m. Those with a turnover greater than this will not be eligible. In addition, it was noted that Seychelles has offered a presumptive tax with a 1.5% rate since 2013.

In the Budget, it is proposed that the following businesses will no longer have 5% tax deducted at source (DAS): building contractors, maintenance contractors, mechanics, hirers or operators of plant and equipment, or hirers of buses.

Amendments are proposed to the Business Tax Act to clarify, first, that Seychelles will have a territorial tax regime and, second, tax on depreciable assets will be limited to the original cost of the asset.

From 2019, the following tax concessions for the tourism sector will be repealed:

  • accelerated depreciation and the 200% allowable deduction for marketing and promotion costs. Instead the Government is considering offering a 200% allowable deduction for employing a qualified Seychellois graduate holding a Certificate, Diploma, or Degree or higher from an institution endorsed by Seychelles Qualification Authority (SQA); a 150% deduction for emoluments paid by an employer to a Post-Secondary or Tertiary, who is in full-time education and in part-time employment, and 150% for a business paying for training endorsed by the Agency of National Human Resources Development (ANHRD).
  • for the maritime industry, “artisanal and semi-industrial fishermen” will no longer be included in the scope of the business tax regime; instead they will play a fee in addition to current license and registration fees.

The Government has proposed to amend the tax rules for landlords of residential buildings to replace the current 15% tax with a 3% tax on gross rental receipts.

These business tax reform proposals are proposed to be effective from January 2019.

In addition, the Government is to reintroduce legislation to establish an immovable property tax, having earlier shelved plans to introduce this tax from July 2017. Under the levy, a rate of 0.25% will be charged on the capital-improved value of property owned by all foreigners as from January 2018. The tax will be applicable for all foreign-owned residential, company-owned, and leased properties of more than 25 years. Owners must make a declaration between January and June 2018, with collections expected to start from October 2018.

In accordance with the Budget, changes to the International Trade Zone Act, 1995, will be considered for inclusion in the 2019 Budget. The rate of tax on plug-in hybrid vehicles will be lowered from 15 to 10%. The Budget also exempts from VAT funeral services and reduces customs duty on dietary supplements from 25 to 0%.

Finally, it was announced in the Budget that the Seychelles Revenue Commission’s (SRC’s) organization structure will be re-organized in 2018.

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