Numerous Bills approved by National Assembly |14 April 2021
During yesterday’s sitting, the National Assembly deliberated upon numerous Bills, including the Corporate Social Responsibility Tax Repeal Bill, 2021, and others proposing amendments to public sector entities.
Minister for Finance, Economic Planning and Trade Naadir Hassan appeared before the assembly during the morning session to present the Corporate Social Responsibility Tax Repeal Bill, 2021, on account that the tax impacts adversely on business organisations. The Bill was approved by 23 votes in favour.
In introducing the Bill, Minister Hassan noted that the CSR Tax Act 2013 came into effect on January 1, 2014, with the aim of promoting the engagement of the private sector to donate and sponsor towards community-based programmes, and to enable government to collect additional revenue, on account that many businesses were failing to meet tax requirements.
According to Minister Hassan, government in 2019 embarked on a series of consultations, with the aim of reforming the domestic tax regime. Based on the consultations, it was found that the tax negatively impacts on businesses, on account that it is based on revenue and profits and fails to take into consideration expenses incurred by businesses. Furthermore, the law served to encourage businesses to operate in informal sectors further discouraging them from declaring revenue.
In view of the economic crisis and state of the domestic economy, numerous members intervened echoing similar sentiments in saying that the tax is unfair, affording their support for the Bill, based on the premise that it will come as a relief to businesses who are struggling to generate revenues in the current economic climate.
In response to members who sought clarifications as to how civil society will fare without sponsorship, Minister Hassan clarified that such organisations can apply for a certificate of charity status, also noting that the repeal does not limit business organisations from contributing towards the local community and civil society.
“The philosophy behind the tax is wrong, and is one which is punitive in the way in which it is applied. I think it is critical that we do it now, as it provides relief to businesses facing challenges, and during the next phase, we will consider lowering the tax rates,” Minister Hassan asserted.
The assembly also considered and approved two Bills presented for approval by Minister for Investment, Entrepreneurship and Industries Devika Vidot for agencies under her portfolio, including the Enterprise Seychelles Agency (ESA) and the Industrial Estates Authority (IEA).
The bills propose the removal of the board of directors for such entities, towards more transparency and efficiency, while also permitting better management and involvement of the ministry over the entities. By removing the boards, government stands to make cost savings in excess of R1 million annually.
“The President came to the decision based on the recommendations of technicians, as we observed there was a lot of inefficiency, and accountability has also been a concern. We are not making any major changes as to the role of the minister with the agency, but what we are removing is the additional layer of governance, and remove the complexities,” Minister Vidot stated, noting the disparity in the functioning of boards in previous years.
The Bills include the Enterprise Seychelles Agency Amendment Bill, 2021 and the Industrial Estates Authority Amendment Bill, 2021.
The assembly will this morning be considering a third Bill, proposing the removal of the board of directors for the Seychelles Investment Bureau (SIB), through the Seychelles Investment Board Amendment Bill, 2021.