Uniformity in income tax rate for Seychellois and non-Seychellois |13 May 2011

The new rate of 15% effectively means that all employees, Seychellois and non-Seychellois, starting the month of January, have been paying taxes at the same rate. 

This adjustment in rate applies to all employees irrespective of salary level or post being occupied and whether you are employed by the private or public sector, or whether you are on a part-time, casual or full time basis.

Was the salary of the non-Seychellois affected by the uniformity in income tax rates?
The take home pay of non-Seychellois employees did not change despite the increase in the income tax rate.  The increase in rate is a cost to be borne by the employer as part of his total employment cost. 

A non-Seychellois employee that was earning, for example, a gross salary of SR5,416.50 after the grossing up in July 2010, as from January 1, 2011, was required a further grossing up of +5.88% so that the take home pay remained the same after the tax deduction of 15% beginning January 1, 2011. Detailed hereunder is the salary working for an expatriate who was earning a salary of SR5,000 as at July 1, 2010 compared to the salary earned as at January 2011.

The increase in the income tax rate is in line with Paragraph  3 of the First Schedule in the Income & Non-Monetary Benefits Tax Act, 2010,whilst the grossing up is in line with S.I. 100 of 2010 of the Employment Act. Both SIs can be downloaded from the SRC website (www.src.gov.sc)

Have the other rates under the Income and Non-Monetary Benefits Tax Act changed?
It is important to note that all the other applicable rates, as per below, under the Act remains:

• Non-Monetary Benefits tax payable by an Employer is 20%;
• Domestic worker   -   SR 50;
• Day Care Worker   - Either SR 100 or 10% of total emolument whichever is lower;
• A person employed by either a Farming Company or a Boat owner (as defined under the Agriculture & Fisheries Incentives Act, 2005 is SR 100;
• A person receiving an emolument financed by means of an overseas grant under a specific program or an approved project is 2.5% of the gross amount received.

However the Second Schedule of the Income and Non-Monetary Benefits Tax has been amended to include an emolument being an overtime payment and an emolument being payment in lieu of leave as exempt emoluments.  Effective May 1, 2011, income tax is no longer payable on overtime payment and payment in lieu of leave. There will be an article next week to give more details on this amendment.

For more information
If you need further clarification about the Income & Non-Monetary Benefits Tax, please visit the Seychelles Revenue Commission Advisory Centre, Room 2 (Ground Floor), Ocean Gate House, Victoria or contact us on the following address:  Seychelles Revenue Commission, P.O. Box 50, Orion Mall, Victoria, Tel: 293737, E-mail: commissioner