07.26.17

Seychelles to announce SME Tax Cuts in Budget

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

Government ministers from the Seychelles have met with local businesses to discuss reforming and potentially enhancing the tax incentives for businesses and in particular SMEs.

According to the Government of the Seychelles, the meeting had been held ahead of the release of a 2018 Budget. It said that the Government is investigating ways to harmonize existing tax breaks, including those under the VAT, trade tax, excise tax, business tax, and income tax regimes.

It was indicated that the Government favors lowering taxes for small- and medium-sized firms (SMEs). A reduction to the 15% VAT rate on insurance policies was discussed, in order to make such products more affordable for all, especially for the needs of SMEs.

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.

06.05.17

Seychelles introduces penalties for late Business Activity Statements

Posted in Business and Economy, Seychelles government at 7:13 pm by Robert Klien

As of June 1, the Seychelles Revenue Commission had been applying penalties for late submission of business activity statements (BAS).

Through the business activity statements, businesses must report and pay a number of taxes, such as goods and services tax, pay-as-you-go (PAYG) tax installments, PAYG withholding, excise tax for locally manufactured goods, and income and non-monetary benefits tax.

Following the entry into force of Statutory Instrument 1 of 2017, the following penalties apply from June 1:

– SCR500 (USD36) in the case of a small business, plus SCR50 for each week or part of a week that the form is not furnished;
– SCR1,000 for medium businesses, plus SCR100 for each week or part of a week; or
– SCR5,000 in the case of a large business, plus SCR500 for each week or part of a week.

05.15.17

Seychelles alters Tax Exemption for 13th month salary

Posted in Business and Economy, Seychelles government, Seychelles legislation, Seychelles offshore jurisdiction at 7:16 pm by Robert Klien

The Seychelles Government has recently published legislation in the Official Gazette to amend the jurisdiction’s individual tax regime.

Published in the Official Gazette on April 13, 2017, the Income and Non-Monetary Benefits Tax Act (Exemption) Order, 2017, sets the value of 13th month pay that an employee can receive tax-free at SCR10,000 (USD733).

Payments in excess of this amount will be subject to tax at 15%.

02.20.17

Individual Income Tax Changes delayed in Seychelles

Posted in Business and Economy, Seychelles government at 1:28 pm by Robert Klien

On February 14, in his State of the Nation Address, President Seychelles’ Danny Faure announced that the implementation of a progressive personal income tax regime will be delayed to January 1, 2018.

Under the new regime, a SCR 8,555.5 (USD 630) tax-exempt threshold will be introduced. However, it will not be available to expatriates. Income tax above that threshold will be subject to progressive rates of 15%, 20%, or 30%.

Its introduction had already been delayed to July 1, 2017, rather than January 1, 2017, in the 2017 Budget announced in December 2016. According to the President, the further 6-month delay is needed for more qualitative preparation.

Also, he disclosed that, within its continuing policy to reduce the cost of living in Seychelles, the Government of the jurisdiction will revise the list of goods which will not be subject to value-added tax (VAT). The revised list, which will include new products, will be published as from March 1, 2017.

12.13.16

Seychelles to introduce Significant Tax Changes in 2017

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

According to the jurisdiction’s newly released Budget, Seychelles will finalize significant reforms to its main taxes in 2017.

Seychelles will complete the introduction of a progressive personal income tax regime from July 1, 2017, rather than January 1, 2017. A SCR 8,555.5 (which is USD 660) tax-exempt threshold will be introduced, but it will not be available to expatriates. Income tax above that threshold will be subject to progressive rates of either 15%, 20%, or 30%.

From July 1, 2017, 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.

The Government of Seychelles is also planning to change the Business Tax Act. The tax-free threshold for individual businesses, such as sole traders or partners, will remain at SCR 150,000. However to align personal income tax (PIT) and individual business tax rates, the tax rate on profits of between SCR 150,000 to SCR1m will be increased from 15% to 20%. Profits above SCR1m will continue to be taxed at 33%.

In addition, it is proposed that the presumptive tax rate will be realigned. The tax rate on businesses with a turnover of up to SCR 0.5 million is to remain at 1.5%, but a 3% tax will be imposed on businesses with a turnover from SCR 0.5 million. The new cap for the presumptive tax is proposed to rise to SCR 2 million, up from SCR 1 million. Professional taxpayers, such as accountants and engineers, will pay a 5% rate.

Included in a substantial series of measures to help small and medium-sized enterprises (SMEs), the Government will exempt businesses with an annual gross revenue of up to SCR 1 m from paying tax in their first year of operation. Larose said that the medium- to long-term target is “to turn Seychelles into the SME capital of the Indian Ocean.”

Also, an additional cost for foreign visitors disembarking at the Seychelles International Airport was announced. As from July 1, 2017, the Seychelles Civil Aviation Authority will impose an additional USD 10 passenger service fee.

12.10.16

New tax measures announced in budget address

Posted in Business and Economy, Seychelles government, Seychelles legislation at 2:45 pm by Robert Klien

The Seychelles Minister for Finance, Trade and Economic Planning Peter Larose, delivering his budget address before the National Assembly on December 9.

A new tax on property owned by non-Seychellois citizens will be introduced in July 2017, said the Seychelles’ Minister of Finance in his presentation of the budget allocation 2017 to the members of the National Assembly.

Peter Larose is proposing a budget allocation amounting to around $584 million.

The new tax “will include foreigners with a Seychellois passport. Stamp Duty will be charged per square metre,” Larose said.

Also, he announced other new tax measures in his budget address including excise tax on fuel, excise tax on alcohol and tobacco products and progressive tax.

Larose said that for the excise tax on fuel, “An additional 50 cents per litre will be placed on fuel-based products. The Public Utilities Corporation (PUC), the Seychelles Public Transport Corporation (SPC) and Air Seychelles will not pay the additional cost.”

As regards excise tax on alcohol, an increase of 10% will be applicable on all drinks with an alcohol content of less than 16% in 2017. This will apply for both locally produced and imported alcoholic beverages.

In line with this revision, a 10% increase will also be placed on importation and production of tobacco products in 2017.

As for the Progressive Tax, the third and final stage will be implemented as of July 1, 2017, instead of January as was announced previously. This will be the Progressive Tax applicable on emoluments more than $648. A 15% rate will be applicable on earnings between $648 and $758 while a 20% tax will be applicable on earnings between $758 and $6,320. Workers with salaries above $6,320 will have to pay 30% on earnings above that threshold.

Larose also announced an additional cost for the services used by foreign visitors disembarking at the Seychelles International airport – as of July 2017, the Seychelles Civil Aviation Authority (SCAA) will put an additional $10 for services related to incoming foreign passengers.

08.16.16

Seychelles maintains credit rating, which signals economic stability

Posted in International Organisations, Seychelles government, Seychelles' statistics at 10:20 am by Robert Klien

According to the Seychelles Finance, Trade and Blue Economy Minister, Jean Paul Adam, a credit rating of BB- for the 2nd straight year for the Seychelles’ government signals the jurisdiction’s economic stability and increased resilience amid global economic uncertainty.

Fitch Ratings gave Seychelles the same grade in 2015.

The finance minister said that the rating and the archipelago’s ‘stable outlook’ affirmed by Fitch is a show of confidence in Seychelles economy. He said: “Quite a number of countries including both highly developed countries and developing African countries have been downgraded due to global uncertainties, so for us this shows that we are on the right track”.

“Fitch Ratings has affirmed Seychelles’ Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘BB-‘ with a Stable Outlook. The issue rating on Seychelles’ unsecured foreign-currency bond has also been affirmed at ‘BB-‘. The Short-Term Foreign- and Local-Currency IDRs have been affirmed at ‘B’ and the Country Ceiling at ‘BB’”.

In 2008, Seychelles had a total public debt that stood at 151% of GDP, with the external public debt representing almost 95% of GDP (USD 808 million). A default in debt payments prompted Seychelles to embark on a 5-year IMF-backed economic reform programme in October 2008, ending in October 2013. This has been followed by a new generation of reforms approved by the IMF in June 2014.

In its latest assessment, Fitch noted that the jurisdiction’s public debt remains on a downward path, while highlighting the fact that the government’s target to reduce the debt to GDP ratio to below 50% by 2018 has now been moved to 2020.

The authorities have also decided to reduce the country’s primary surplus to 3% of GDP for the years 2017 to 2020 compared to above 4% the past 2 years.

06.08.16

Seychelles and Slovenia to sign DTA

Posted in Business and Economy, Double Taxation Agreements, International relations, Seychelles government at 1:03 pm by Robert Klien

Seychelles and Slovenia have agreed to push for the conclusion of a double tax agreement (DTA), during a meeting held to discuss improving bilateral relations.

Slovenia’s Ambassador, Selby Pillay, said: “Slovenia and Seychelles are connected by many attributes. As small states, we understand each other’s efforts and we would be pleased to share and exchanges experiences in the fields of environment and nature conservation and tourism.”

Following the meeting, a statement was issued to announce that the 2 jurisdictions are holding negotiations towards a DTA, which would ensure that income from cross-border trade and investment is taxed only once. It would allocate the taxing rights of both Seychelles and Slovenia; potentially reduce withholding taxes on dividends, interest, and royalties income; and would likely include tax information exchange provisions.

05.19.16

LGBT Rights victory in Seychelles

Posted in International relations, Seychelles government at 2:09 pm by Robert Klien

Same-sex acts are no longer illegal in the Republic of Seychelles, making it one of the few African countries to decriminalize the acts.

On May 18, lawmakers voted for the proposal to amend Section 151 of the country’s Penal Code that named sodomy a felony, punishable with up to 14 years in prison. Fourteen lawmakers voted in favor, others abstained, while 4 were absent.

The amendment comes 3 months after President James Michel’s national address in which he said his government would introduce a bill to abolish Section 151. Michel called the law a colonial remnant and an “aberration” in Seychelles’ “tolerant” society. He reminded the nation of Seychelles’s 2011 agreement with the UN Humans Rights Council to decriminalize homosexuality.

Religious leaders criticized his remarks, saying the proposed bill went against beliefs in this mostly Catholic country.

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