Follow us on:

Facebook Twitter LinkedIn YouTube

Archive -Seychelles

Pension fund contributionsto go up by 1% |12 December 2013

Employers’ and employees’ contributions toward the Seychelles Pension Fund (SPF) will increase as of January 2014 in order to sustain the viability of the fund.

Finance, Trade and Investment Minister Pierre Laporte said the contributions will increase by 1%, meaning employers and employees will each contribute an additional 0.5% of employee gross salaries, bringing the total contribution to the Seychelles Pension Fund to 4%, of which 2% will be made by employers and 2% by employees.

Minister Laporte said this when he presented the 2014 budget to the National Assembly on Tuesday for approval.

Minister Laporte has also talked about new tax policies for the year 2014.

He noted that as announced in the 2013 budget address, as from 2014 most medium and large-sized businesses (except banks, telecommunication companies, insurance companies, breweries and tobacco producers) will pay a 30% business tax rate compared to 33% paid in 2013.

He added that a number of additional measures will be introduced with regards to the Value Added Tax (Vat) in 2014.

The measures taken by the government include:

• Lowering the threshold for mandatory registration of Vat to R3 million, resulting in over 100 new businesses to be registered for Vat;

• Introducing Vat refund at the airport for non-residents and consider extending this to the sea port in July 2014 if feasible;

• Exempting Vat on an additional list of goods and services, including: transfer of immovable property, medical supplies and medical services, uniforms for private schools, and burial coffins.

Minister Laporte said the government is proposing these reductions “to make those goods and services more affordable”, and added “businesses are being urged to pass on the benefits of those reductions to consumers”.

• Abolishing Vat on disposal of assets. This measure will apply to all Vat-registered businesses that, having previously benefited from fiscal concessions upon the importation of their assets, now wish to dispose of them;

• Reducing the timeframe for Vat refund from 45 days to 30 days.

The minister noted that in 2013 the country collected R43 million in Corporate Social Responsibility (CSR) Tax and R20 million in Tourism Marketing Tax (TMT).

“As from January 2014, these two taxes will be covered under their own separate legislation, for which bills will go before the National Assembly soon,” he said.

The minister added that the government is well aware of the private sector's desire to make payment of CSR tax and TMT profit-based, but the fact is that today in certain sectors of our economy the large majority of businesses pay no or minimal business tax, because they continuously declare large taxable losses.
 
“This is partly because policies in place allow businesses to do so. There is thus a need for a comprehensive review of such policies to ensure fairness. This review will guide our decision as to whether or not we make these taxes payable on profits in the future,” Minister Laporte explained.

He noted that each and every person in our society should benefit from the success of our economy and that we all need to enjoy the fruits of our labour. Therefore, every actor in the economy without exception should make a fair contribution, including through reasonable tax payments.

“Growth has to be inclusive, meaning that benefits have to be shared equitably between those who invest and those who work to transform those investments into more wealth,” explained Minister Laporte.

The Vat, CSR Tax and TMT were all introduced in Seychelles this year.

» Back to Archive