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Annual report for financial year 2018 | 24 June 2019

Annual report for financial year 2018

Main tax contribution for 2018

SRC records over-performance in tax collection

 

On June 11, 2019, the Seychelles Revenue Commission (SRC) presented its annual report for financial year 2018.

Among its numerous figures, the revenue commission’s report revealed that the total tax collected for the fiscal year ending  December 31, 2018 was R7.2 billion against the initial revenue forecast of R6.6 billion, representing an over- performance of R567 million or 9 percent.

The main tax line over-performed by R229.6 million or 4 percent and non-tax revenue over-performed by R337.3 million or 147 percent.

All major tax lines recorded surplus except for Excise tax, Custom Duties and Business Tax, which recorded deficit of R84.5 million, R33.1 million and R2.5 million respectively.

Value-Added Tax continued to be the main driver of revenue in 2018 with 38% of total receipts followed by business tax at 20%, Excise Tax at 19% and Income Tax at 14%.

The major setback throughout the year 2018 has been resource wise where SRC has found itself, once again, operating with an acute shortage of manpower, despite numerous attempts to recruit into the vacant positions during 2018. 

According to the report, this is a direct indication that the receipts could have been higher if SRC had been able to fill up all the vacancies.

 

For the year 2018, tourism marketing tax showed to have a bigger growth relative to other tax lines, with a 16.5 percent growth.

The average tax growth up to the fiscal year 2018 was 8.9 percent. Most tax lines recorded a positive growth for 2018, except for Excise and Presumptive Tax, which recorded a negative growth of 2.1 and 0.2 percent respectively.

 

Business Tax

For the fiscal year 2018, Business Tax was the highest under performer with R157.7 million, mainly attributed to companies which recorded a deficit of R133.2 million or 10.4 percent. However, Business Tax receipt was more or less equivalent to the fiscal year 2017.

 

 

 

Personal Income Tax

Income Tax performance for the fiscal year 2018 was above the forecast by R87 million or 10 percent, with the private sector recording strong over-performance of R96 million or 19 percent. Yearly comparison also indicates positive growth of R64.2 million or 7 percent compared to the fiscal year 2017. The Private Sector was the main source of Income Tax receipts contributing 63 percent, mainly attributed to the tourism industry with 30 percent in 2017 and 35 percent in 2018.

 

Sector

YTD Actual 2017

YTD Actual 2018

Variance

2018 Budget

2018 EOY Revised Budget

Variance

Diff. with Budget

Diff. with OEY Revised Budget

Central Gov.

244.1

235.9

-8.1

223.7

237.1

13.4

12.2

-1.2

Other Public Sector

129.0

122.0

-7.0

112.7

129.8

17.1

9.3

-7.8

Private Sector

527.8

607.2

79.4

480.8

511.2

30.4

126.4

96.0

Total Receipts

900.9

965.1

64.2

817.2

878.1

60.9

147.9

87.0

 

 

Presumptive Tax, Corporate Social Responsibility Tax and Tourism Marketing Tax

During the fiscal year 2018, R12.7 million was collected under Presumptive Tax, representing a year on year increase of 1 percent.

Meanwhile, Corporate Social Responsibility Tax performed above the forecast by R1.6 million or 2 percent. Yearly comparison indicates a positive growth of R11.1 million or 12 percent compared to the fiscal year 2017.

Tourism Marketing Tax performed above the forecast by R1.8 million or 3 percent. Yearly comparison indicates a positive growth of R10 million or 17 percent compared to the fiscal year 2017.

 

Value Added Tax (VAT)

During the fiscal year 2018, overall VAT receipts were above the forecast by R51.9 million or 2.1 percent. However, further analysis indicates a deficit under VAT Import by R15.1 million as opposed to the strong performance under VAT Domestic by R66.9 million.

Tourism sector was the main source of VAT Domestic income representing 56 percent in total for the fiscal year 2018. Yearly comparison shows a substantial increase in total VAT by R313.8 million or 14 percent, driven mainly by Domestic Tax with R256.2 million.

Both VAT deferred payment and Exemption reduced by R206.7 million or 52 per cent and R3.1 million or 12 per cent in 2018 compared to significant increase recorded in fiscal year 2017.

During the fiscal year 2018, R2.6 million was collected under GST Arrears.

 

 

Value Added Tax

YTD Actual 2017

YTD Actual 2018

Variance

2018 Budget

2018 EOY Revised Budget

Variance

Diff. with Budget

Diff. with OEY Revised Budget

VAT Domestic

1,294.1

1,550.2

256.2

1,318.4

1,483.3

164.9

231.8

66.9

VAT Import

910.2

967.8

57.6

1,026.3

982.9

-43.5

-58.6

-15.1

Total Receipts

2,204.3

2,518.0

313.8

2,344.8

2,466.2

121.4

173.2

51.9

 

 

Excise Collections

For the fiscal year 2018, Excise Tax recorded an under performance of R53.5 million or 4 percent, with both LMG and Imports recording deficit

of R10.1 million and R43.4 million respectively. The biggest surplus recorded was on import alcohol with a total of R5.3 million. The total tax receipt for 2018 also declined by R27.1 million compared to 2017.

 

Customs Duties

For the fiscal year 2018, collection of Customs Duties was above the revised forecast by R14.7 million or 5 percent. Collection of Customs Duties also recorded a positive growth of R25.6 million or 9 percent for the year 2018.

Alcohol was the main source of Customs Duties collected, representing 40.26 percent in total for the fiscal year 2018. Yearly comparison shows an increase in total Customs Duties collected by R25.5 million.

The top 10 countries of origin for imports represent 78 percent of total import receipts collected in 2018. Thirty-seven (37) percent of imports originated from the United Arab Emirates, followed by the UK with 9 percent. 18 percent of imports came from Europe, 10 percent from Africa, 34 percent from the Middle East and 16 percent from Asia.

 

Other Non-Tax Revenue

During the fiscal year 2018, R568.2 million was collected under other Non-Tax revenue, of which R191.9 million relates to License fees and R209.3 million relates to collection of Social Security Arrears. The other component of R167 million relates to levies/prepayment and other fees and fines.

 

Refunds

In 2018, SRC issued refunds amounting to a total of R284.4 million, representing an increase of R70.7 million or 33 percent compared to the fiscal year 2017.

A reduction can be observed under VAT by R41.6 million or 31 percent. On the other hand, Excise Tax refunds increased substantially in 2018 by R77.8 million as a result of changes in the procedures of petroleum refunds and introduction of refund to fishermen. Business Tax refund also increased in 2018 by R27.4 million or 39 percent.

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