Income tax and non-monetary benefits tax |25 June 2010

The Income and Non-Monetary Benefits Tax Act 2010 becomes effective on July 1. The income and non-monetary benefits tax is a tax levied on employees and employers.

The income tax (on emoluments, eg salary and allowances) will be payable by employees, whereas the non-monetary benefits tax (on, for example, motor vehicles and accommodation) will be payable by the employers.

What are the applicable income and non-monetary benefits tax rates?
The rates of income tax payable by an employee in respect of emoluments received from July 1, 2010 are as follows:
• Income tax (Seychellois employees) – 18.75%
• Income tax (non-Seychellois employees) – 10%
• Non-monetary benefits tax – 20%
• Domestic worker – R 50
• Daycare worker  –  either R100 or 10%, whichever is lower
• A person employed by either a farming company or a boat owner (as defined under the Agriculture and
Fisheries Incentives Act 2005 – R100

How is income tax calculated?
Add together all your cash remuneration for the month. This will include your basic pay, allowances, overtime, payment in lieu of leave etc.  An example for a Seychellois employee is given below:
Monthly basic salary – R 4,000
Allowances  - R 1,200
Total emoluments - R5,200
The total emoluments of R5,200 should be grossed up by 20% – R5,200 x 120% = R6,240.
Note that grossing-up of the employees’ emolument should happen only for people in employment as at July 1, 2010 and it is a once-only requirement.

Income tax R6,240 x 18.75% = R1,170 (payable by the employer on behalf of the employee).
Note: The net take-home pay of a Seychellois employee should not be more or less than what he was taking home under the social security system.

How is non-monetary benefits tax calculated?
Motor vehicle  –  R2,000
Accommodation – R3,000
Gross non-monetary benefits – R5,000
Non-monetary benefits tax on R5,000 x 20% = R1,000 (payable by the employer)

What will be my obligation as an employer?
The employer is required to:
• Withhold tax at the applicable rate from the employees’ total emoluments
• Pay 20% tax on the non-monetary benefits
• Remit the tax withheld, together with the non-monetary benefits tax if any

What will happen to the amount withheld?
Income tax withheld on the emoluments of employees is required to be remitted to the Seychelles Revenue Commission on a monthly basis using the Business Activity Statement (BAS form).

Other than the compulsory employer’s details, the employer is required to show total employees as featured on the payroll, total emoluments paid and tax payable thereon.  A copy of the employer’s payroll must be attached to the BAS form.

What is the due date for payment of income tax?
Income tax is due when payment of the emolument is made and is required to be remitted to the Seychelles Revenue Commission by the 21st day after the month the withholding occurred.

What will be my obligation as an employee?
Employees will be able to check their pay slips to see that income tax has been deducted and they can always contact the Seychelles Revenue Commission to ensure that income tax withheld has been remitted to the commission on their behalf.

Should the information provided by the employee differ from the amount received from the employer, the employee will be asked to complete a declaration statement, and any discrepancy observed will be followed up with the employer.
 A copy of the employer’s payroll must be attached to the BAS form.

For more Information
If you have any doubts about income and non-monetary benefits tax, please visit the Advisory Centre, Room 2 (Ground Floor), Oceangate House, Victoria, or contact us on the following address: Seychelles Revenue Commission, PO Box 50, Orion Mall, Victoria. Tel: 293737. E-mail commissioner@src.gov.sc