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.

05.15.16

Seychelles ready to support Sri Lanka’s probe on offshore bank accounts

Posted in International relations, Offshore Banking, Offshore Services, Seychelles government, Seychelles offshore jurisdiction at 2:16 pm by Robert Klien

The government of Seychelles is ready to cooperate with the Sri Lankan government in its efforts to investigate into fraud and corruption, especially with regard to offshore bank accounts and assets in the Seychelles.

The Seychelles is already cooperating with the Sri Lankan government through the Finance Investigation Unit in Seychelles with regard to investigations into any fraud and corruption.

Seychelles Environment, Energy and Climate Change Minister Didlier Dogley said that Seychelles has signed the OECD guidelines for offshore banking to keep offshore dealings transparent. So, all information on transactions can be inspected and checked by authorized bodies. He noted that owners have to be declared for each account opened in Seychelles. Earlier in other jurisdictions, people were able to open a briefcase and didn’t have to declare ownership, while this is impossible today as all jurisdictions are reviewed. The minister said that Seychelles is “one of the countries that is clean” as it is abiding by all international rules.

The Seychelles is ready to help the Sri Lankan government in investigating fraud and corruption. “We have made sure that we are not allowing the wrong people into our country. So if there is any investigation, Seychelles will cooperate as long as it is reciprocal on both sides,” the minister added.

05.01.16

http://www.src.gov.sc/

Posted in Business and Economy, International Organisations, Seychelles government at 1:59 pm by Robert Klien

OECD confirms that Seychelles has appropriate Tax Data Safeguards

The confidentiality safeguards implemented within the Seychelles Revenue Commission (SRC) have been approved by an expert assessment carried out by the OECD’s Global Forum on Transparency and the Exchange of Information for Tax Purposes.

Seychelles has obtained a largely compliant rating from the Global Forum. Also, the jurisdiction has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in 2015. To add, Seychelles opted for early adoption in 2017 of the Common Reporting Standards, the new standards in the automatic exchange of tax information (AEOI) between countries developed by the OECD.

In view of the upcoming implementation of AEOI by Seychelles, whereby it will also be able to request information from other tax authorities, the Seychelles Revenue Commission has recognized that an important aspect of the AEOI standard is that data and information it receives should be kept confidential and appropriately safeguarded from improper use and disclosure. So, other jurisdictions that provide tax data can be assured as to its future use.

The Government of Seychelles said that Global Forum experts conducted a confidentiality assessment in November 2015 and have now confirmed their endorsement of the data safeguards put in place by Seychelles.

04.05.16

Seychelles to limit Presidential Term

Posted in Seychelles government, Seychelles legislation at 2:20 pm by Robert Klien

On April 5, Seychelles parliament voted to amend the constitution and limit presidents to two 5-year terms in office, in contrast to wider Africa where many presidents have sought to extend term limits.
The jurisdiction’s nation elected James Michel as president in December 2015, giving him a 3rd term in office, but among the promises he made during his campaign was to ensure the change in the law.

The amendment required 2/3 thirds of the 32 lawmakers to vote in favour but all sitting members are from the ruling party except opposition leader David Pierre, who also supported the change. Pierre said that this amendment will give a chance to younger politicians to wait 10 years instead of 15, in order to contribute to the development of the Seychelles.

The new amendment will come into force at the next elections, when the incumbent president and vice president will not qualify to run for these positions.

03.30.16

IMF says Seychelles needs to offset Income Tax Cuts

Posted in Business and Economy, International Organisations, Seychelles banking, Seychelles government, Seychelles' statistics at 2:11 pm by Robert Klien

According to the statement following an International Monetary Fund (IMF) staff mission to the Seychelles from March 9-22, the anti-poverty initiatives mentioned in last month’s State of the Nation Address need to be counteracted by other measures.

In his State of the Nation Address, the President Michel disclosed that, as well as minimum wage and pension increases, changes will be made from July 2016 to the personal income tax system, aimed to make it more progressive and reduce the tax burden on low-income earners.

At the conclusion of the IMF’s visit to conduct discussions on the 4th review under the Extended Fund Facility (EFF) arrangement with the Seychelles, the mission noted that, while the economy performed positively in 2015, “slowing growth or recession in a number of key tourism markets could weigh on economic developments in 2016.”

At the end of the IMF’s third EFF review, in January 2016, the International Monetary Fund had concluded that “continued fiscal discipline will be a critical anchor for macroeconomic stability.” It was confirmed that fiscal policy in 2016 continued to target a primary surplus of 3.8% of GDP (gross domestic product). However, the Fund’s latest mission estimated that the newly announced measures “would entail substantial fiscal costs – around three percent of GDP on a full-year basis.” It concluded that “it is important that policies to ensure that the economic benefits from years of strong fiscal consolidation are shared more widely do not undermine macroeconomic stability. The mission therefore recommends that [the new measures] be accompanied by offsetting measures to avoid putting pressure on the balance of payments, inflation, and public debt.”

In that respect, immediately following the IMF mission, the Central Bank of Seychelles (CBS) took steps to reduce the excess liquidity within the monetary system. After analyzing the recent measures announced by the Government of the Seychelles, CBS was counteracting an expected increase in liquidity and demand for foreign currency in the coming months.

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