Collecting tax revenue still among the greatest challenges of SRC |09 April 2018

Even though measures have been strengthened and more revenues are being collected in terms of taxes, recovering unpaid taxes remains among the greatest challenges the Seychelles Revenue Commission (SRC) is facing.

The new chief executive of the SRC, Ronald Cafrine, and other key officials of the entity once again appeared before the Finance and Public Accounts Committee (FPAC) of the National Assembly on Friday to answer questions and clarify deficiencies and other shortcomings in their accounts which the Auditor General’s report for 2016 had highlighted.

The points raised were in relation to excise taxes on productions, fuel, alcohol, cigarettes and vehicles. The FPAC wanted more clarity on taxes being collected on fuel sold to the PUC and the SPTC by Seypec, the challenges the SRC is facing to enter related data in its system and to clearly determine what the company is owed in terms of taxes, what the law states and what mechanisms have been put in place to address the situation.

The need for reinforced control on receipt books, need for standard operating procedures for customs to recover uncollected payments some dating back to 2008 and some involving several millions of rupees owed to the SRC by Seypec in fuel sales to the Seychelles Fishing Authority (SFA).

Mr Cafrine explained measures being taken to strengthen recovery mechanisms and procedures include a new recovery strategy to address overdue payments and recruitment of more competent agents to undertake the process. But he stressed that even though more resources are being injected to upgrade the process and revenues collected are increasing and are above expectation, recovery remains among the greatest challenges among others.

But in regard to revenue collection, the FPAC has stressed that stricter and more reinforced measures should be continuously stepped up and the SRC should do away with the bad practice where large businesses are being allowed to pay what they should by instalments and even default while at the same time they are making large profits on goods they are selling. 

Mr Ramkalawan stressed that it is high time businesses realise that it is these revenues that go into the funding of social programmes like housing, education, health, among others.

He stressed that the SRC should review this payment process and consider withholding goods imported in the country until full payment has been made to ensure the required revenues that the State really needs enter its coffers.

Other members of the FPAC strongly supported the proposition and added that the SRC is fostering a system that is benefitting large businesses and not small companies which are honouring their obligations.

Mr Cafrine pointed out that the payment by instalments have been in place for a long time and businesses have come up with numerous arguments to justify it.

“The law provides for instalment payments with interest to discourage defaulters but we agree that there is a need to review the practice and probably get rid of it,” Mr Cafrine pointed out.