Commission names tourism services due to see GST rise


13-October-2011

Mrs FanchetteThey are hotels, guesthouses or self-catering establishments, cafés or restaurants, airline transport services, fixed rotary wing air transport services, domestic ferry services, boat or yacht charter services –including live-aboards, car hire operators, underwater dive operators or dive centres, water sports operators, travel agents, tour operators, tour guides and equestrian operators.

She said the GST introduced in July 2003 and for tourism services was initially 7% – except for airline and helicopter transport services which was at 15%.

“In 2007, the GST rate for helicopter transport services was changed from 15% to 7% and in November 2008 the rate for tourism service providers was changed to 10% and 12% in November 2010.

“It should be noted that the Hotel Owners Association made a request to the Ministry of Finance not to increase the rate of GST from 10% to 12% in November 2009 and was granted a moratorium of one year due to the global financial crisis which occurred in year 2008,” she said.

Mrs Fanchette recalled that the Minister for Finance and Trade, Vice-President Danny Faure, announced in his 2010 budget address that the rate of GST for tourism service providers will increase from 12% to 15% in 2011.

“At the same time, the government also wanted to harmonise or have one standard tax rate of 15% in place.  GST on imports is currently 15% and is soon to be replaced by Value Added Tax at 15%, GST on telecom, insurance, professional services is already at 15% as well as income tax.”

She said although the 15% becomes effective on November 1, 2011 services provided to clients prior to that date where actual payment for the service is received on or after November 1, 2011, the GST liability will be limited to the existing rate of 12%.

“It is important that proper records are kept of all services provided prior to November 1, 2011 and paid for at the old rate of 12%.  The Seychelles Revenue Commission auditors will be monitoring remittances received for this period closely,” she said.

She said the GST on services shall be calculated on the receipted amount of the service as follows:

     Receipted Amount - (Receipted Amount)
                                                    1.15

“For example if the sale/income for a given month is SR10,000, the GST due is as follows:

        10,000 – (10, 000) = SR1,304.35
                                                    1.15


“This amount has to be remitted to the Seychelles Revenue Commission using the Business Activity Statement on or before the 21st day of each month.

The Forecasting Analysis Branch in the ministry expects additional GST revenue as a result of the increase to be about R10 million per month, she said.

She said it is expected that people who use these services, for example those who travel by boat or plane to other islands, will  see an increase in their costs as the service providers pass on the extra 3% tax to consumers.

She urged people desiring further information or clarification on the new GST rate to contact the SRC advisory centre in Room 2 at the Oceangate House or telephone 4293741/42/43.

 

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