Proposed tourism levy meets further resistance   By Patrick Joubert |25 July 2023

(L to r): Ms Lepathy, SS Payet, Ms Joymon and Mr Lebon

Tourism establishments and yacht operators are against plans by government to regulate their trade as responsible to collect the tourism environmental sustainability levy which will take effect as from August 1, 2023.

They made their voices heard during a meeting organised yesterday afternoon by the Ministry of Finance, National Planning and Trade at the Seychelles Trading Company (STC) conference room, Latanier road, to present the final proposal which explains the rules and regulations for the implementation of the levy. 

The panel from government for the discussion included the secretary of state for Finance, National Planning and Trade Patrick Payet, director-general destination planning and development in the tourism department Paul Lebon,  director general for domestic and international tax policy division Seylina Joymon and the director compliance programme and policy unit at the Seychelles Revenue Commission (SRC), Roseline Lepathy.

SS Payet said the proposed levy will be taken back to cabinet for further discussion and a decision will be taken by Wednesday July 26, 2023.

The tourism environmental sustainability levy for visitors living in tourism establishments was approved by the cabinet of ministers early this month after further discussion with the trade. The price per visitor is as follows: R25 for small hotels, R75 for medium size hotels and R100 for large hotels. Children below 12 years old, airline staff and locals are all exempted from the levy. Visitors staying with friends or families members will also not require to pay since they will not be staying in a licensed accommodation establishment.

During the discussion, members of the tourism accommodation industry called for the government to turn to Travisory which is now called the new Seychelles Electronic Border System, for the collection of the levy given that it is linked up to several other operators on its website including advertising for environmental donations for our environment, or to have the Seychelles Revenue Commission (SRC) to collect the levy upfront at the airport either on arrival or departure.

While they agree for government to collect its tax for the protection of the environment, they did not agree on the payment of R25 per visitor at small size hotels, R75 for medium size hotels or R100 for large hotels, but rather for a flat rate paying system instead to be decided by government.

In numbers at the meeting, members of the tourism trade also called for a relook at the whole of the proposed concept before it becomes law as other than removing the collection burden on them, there are some issues which need to be addressed, such as the commission collected, the levy transaction by Booking.com and 3% charge paid by them on the levy transaction paid by clients via card payment, boat crew members among persons to be exempted from the levy. They requested that the law does not go into force on August 1, 2023, but only after it has been reviewed to suit all actors in the accommodation trade.

Members of the tourism trade in accommodation said collecting the levy on behalf of SRC will complicate the running of their businesses as they will feel embarrassed facing the clients who are already paying a lot to come here coupled with other environmental levies on access fees which they pay when they go out to places. Some also think that visitors staying with friends or family members should pay the levy as well. Some went as far as threatening not to collect the levy if it is implemented in August this year.

Speaking to the press after the meeting, Seychelles Hospitality and Tourism Association (SHTA) chairperson Sybille Cardon said the association has long made suggestions for the levy to be collected by Travisory but its proposal was not taken into consideration.

She noted that she was very happy with the turnout for the meeting and mostly everybody had had the chance to voice out their opinions in regards to the draft proposal of the levy.  

“We have all agreed that the tax should be collected via Travisory or by other means like the association had stated since the beginning. So we have called on SS Payet to return to the government and cabinet to discuss on a solution and to get back to us so that we can decide what to do next,” said Mrs Cardon.

Alister Maiden from Seal Super Yacht said:“I think my reaction is like everyone else’s. It’s a bit of a shock and most people are particularly upset about the way it has been proposed to us and the way they anticipate that the environmental levy is going to be collected and that’s one of the main problems.”

He noted that the announcement for the introduction of the levy was made on April 1, 2022 and following the announcement a series of consultation meetings with the tourism trade was held by end of January 2023 with tourism actors on Praslin and La Digue by end of January 2023 and beginning of February 2023 respectively, where several reservations regarding the levy’s structure and implementation were raised including proposals for Travisory to collect the levy and the introduction of a flat rate.

As for SS Payet he said: “We had discussed over it with government and the final draft proposal by cabinet is the one that we are now working on to finalise it into law to ensure that it is implemented on August 1 this year. Today, we came to explain to them what the law will entail, but we see that the reservations on the proposed levy still exist. We will go back to government to see if the proposed levy will be implemented as is or if it will be adjusted as a result of the reservations that came out and by the end of Wednesday we will inform the tourism trade of any decision taken.”

He noted that Travisory was put in place for border control, especially during the Covid-19 pandemic and not to collect taxes for government.

He noted that other links on Travisory are services in nature and not to collect revenue for government, adding that they will have to discuss with Travisory it it could possibly constitute such link to collect the levy.

With regard to the commission charged on tax paid by clients by Booking.com, SS Payet said that they are working with the Attorney General’s office to in line with some international jurisdictions the overseas tourism booking company cannot collect commission on taxes paid by clients on behalf of our government. He stated that the 3% charge on card payment transaction is normal and is applicable to all services taking place in the country.

The proceeds from the levy to be paid in Seychelles rupees only are to help reduce the negative impact on the environment caused by the tourism industry. A recent Climate Public Investment Management Assessment carried out highlighted the need for increased investment by the country into climate mitigation projects, including in the tourism sector given that it is vulnerable to climate change.

As per the Seychelles National Determined Contributions (NDCs) from July 2012, the total investment requirements for addressing climate change amount to US $331 million for mitigation and US $339 million for adaptation. This will rely on domestic and international funding.

The mode of collection (cash/card) is at the discretion of the establishment. It is to be ensured that the amount remitted to SRC align with the rates established. The amount of the levy will not be incorporated in the accommodation establishments’ turnover, thus it will not be subjected to business tax and VAT. Eligible guests are required by law to pay the levy, therefore they cannot refuse to do so.

Patrick Joubert