President James Michel's 2006 National Day Address-Seychellois to get greater stake in dynamic economy |20 June 2006

Speaking in front of a packed Stad Linite during the military parade and patriotic cultural display to mark the 13th National Day anniversary on June 18, and 250th anniversary of the naming of our islands, President Michel announced that more shares in major companies will be made available to the population while there will be further reductions for families in the first home ownership scheme of 2003.

He also announced the continuing modernisation of the tax system, lowering of social security contribution for all businesses, the start of procedures to remove foreign exchange controls, among other measures for further economic dynamism and to lower the cost of living.

The June 18 celebrations were also attended by former President Albert Rene, Vice-President Joseph Belmont, members of the executive, legislature, judiciary and the diplomatic missions based in Victoria.

President Michel said he is realising his vision for the country which he set himself when he took over the presidency two years ago – vision of a strong and compassionate society with a dynamic economy.

"The proof of our two years of hard work is there for all Seychellois two see," he said, adding that the vision had become "a force that is setting the country abuzz with activities and confidence."

"I am sure that all Seychellois feel that they form part of this movement which allows us to look beyond the basic necessities of life and towards greater prosperity which we create ourselves and of which we are the owners," he said.

President Michel said that following the successful privatisation of SACOS (State Assurance Corporation of Seychelles) over the past two months which saw the public and staff buying more that 40 percent of the company's shares, Nouvobanq and the Seychelles Savings Bank will be privatised later this year.

The privatisation of SACOS, the President said, was the first step in turning the Seychellois into a "nation of share holders, entrepreneurs and investors."  More than 9,500 Seychellois are now shareholders in the profitable insurance company.

Procedures for the sale of 30 percent of government shares in Nouvobanq will start on August 14, the President said. This will be followed by the sale of shares in Savings Bank before the end of the year.

He said opportunities also now exist for people to invest in big money-making businesses such as SACOS, Nouvobanq, the Savings Bank, Lemuria, the new hotel to be built at Port Launay and others.

President Michel also announced that later this year the government will create an investment vehicle for people who have shares in SACOS or other companies to give them another opportunity to earn maximum benefits from their investments.

On housing, President Michel said that with the implementation of three home ownership schemes in 2003, 2005 and 2006, more than 16,500 or 75% of families are now owners of their homes.

He announced further discount to people under the first Home Ownership Scheme of 2003 and who are still repaying their loans with the banks.

As from July 1 this year, people under that scheme will benefit from a further reduction of their loans and monthly repayment. He said Government has negotiated with the banks to buy back 20% of the total loan and this will be done through the Housing Finance Corporation (HFC). The Government will also write off the bank loans of those people who have been making repayments for more than 15 years, but in both cases these will exclude arrears, interest on arrears and additional loans.

President Michel also said Government is planning to build more than 5,000 houses during the coming years to enable all applicants who are presently on the list to be assisted in the next five years.

The continued modernisation of the tax system, the President said, will ensure that all businesses become more competitive and gain the same benefits.

Where trades tax on goods is concerned, this has reached zero percent on majority of items but will remain on certain imported commodities such as juice, milk, toilet paper, paint, soft drinks, alcohol, agricultural and fishing products which are also made and produced locally to protect local manufacturers, farmers and fishermen. 

Trades Tax will also apply on only four other categories of items, namely alcohol, cigarettes, fuel and vehicles with certain reductions for various businesses.

He reminded the nation of measures taken over the past two years to bring down the cost of living. These include trades tax reductions, salary increases and ensuring that fuel prices remain stable although prices on the international market continued to rise. There has also been no increase in electricity tariffs.

On lower social contributions for businesses President Michel said legislation will be prepared during the coming weeks so that Seychellois employers would, from January 1 next year, make only a 20 percent social security contribution on salaries between R2,001 and R10,000 compared to 30 percent payable currently.

This will bring employment costs more in line with those of the tourism sector and allow employers to hire more labour or pass on the benefits to workers through, for example, salary increases, the president said.

Speaking about the removal of foreign exchange control, President Michel said that the Government will as from October 1 this year begin the procedures to remove controls in the context of the country's overall strategy to address access to foreign exchange. The strategy will also include a mechanism to mobilize all Seychellois towards savings using bonds and other financial instruments.