The Seychelles Revenue Commission |12 August 2011

It is the body responsible for the administration of Revenue Laws.  For over 50 years Tax and Customs were divisions within the Ministry of Finance but following the enactment of the SRC Act, these responsibilities fell under SRC.

The SRC Act 2009 also mandates SRC to operate as an independent Authority with responsibility to conduct its affairs in a transparent and efficient manner.  However, the Ministry of Finance remains the parent ministry with the responsibility to oversee major policy issues affecting SRC.

SRC is headed by a Revenue Commissioner who is responsible to the Minister for Finance for the management of SRC and the administration of the revenue laws.

Since October 2010, Seychelles Revenue Commission has been undergoing major changes in its organisational structure to make it more in line with international standards and best practice.

The structure is made up of three main divisions namely Domestic Tax, Customs and Support Services.

Each division is headed by an Assistant Commissioner.  In January 2010, the post of the Deputy Revenue Commissioner was also created, with the responsibility to set up and head the Reform Project Office.  The Deputy Commissioner and Assistant Commissioners report directly to the Revenue Commission.

What is Value Added Tax (Vat)?

Overview
More than 140 countries in the world have already implemented a Value Added Tax (Vat). Seychelles will introduce its own Vat on July 1, 2012 to replace the current GST (Goods & Services Tax), aiming at correcting its cascading effects. The Vat Act was passed in December last year.

Vat in Seychelles will not differ from other Vat worldwide. Vat is a broad-based tax of 15% (as officially announced by the vice-president last week) on most goods and services imported, sold and consumed in Seychelles. Vat is a consumption tax which is paid ultimately by final consumers.

Vat is collected at all stages of the supply chain, from imports to retail sales, as long as retailers are Vat registered and provided supplies are not exempted.

• Regarding imports -- Customs will collect Vat (on taxable goods) at the point of entry from the first rupee.

• Regarding domestic supplies – Vat-registered taxpayers (taxable businesses) will be the sole party to be allowed to collect Vat on their sales and to remit it to the Seychelles Revenue Commission. Most of them will be large businesses with a turnover exceeding SR5 millions (as officially announced by the vice-president), but smaller business may voluntarily register for Vat if they meet certain specific criteria.

Value Added Tax means tax on the margin— Taxable businesses are entitled to deduct the Vat charged on their purchases (“input VAT”) against the Vat collected on their sales (“output VAT”). The right amount of Vat to be remitted to SRC by each taxable business is the net (difference) between input tax and output tax. Excess credits may be refunded to the taxable business.

VAT is neutral and fair
Neutrality -- Taxable businesses will not bear the burden of the Vat except where explicitly provided for in the Vat Act 2010. The full right to deduct input tax, except for the final consumers, ensures the neutrality of the tax whatever the nature of product, the structure of the distribution chain and the technical means used for its delivery.

The application of Vat to international trade is based on the destination principle. Exports are free of Vat (with refund of input taxes) and imports are taxed on the same basis and at the same rate as local productions.

Fairness -- Taxable businesses in similar situations carrying out similar transactions are subject to similar levels of taxation.

Contributed by the Seychelles Revenue Commission