21 June 2017
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Seychelles has scope to further increase its tax revenue despite having a relatively high tax-to-GDP ratio already, the International Monetary Fund (IMF) has said.
The fund said that while Seychelles collects more in tax than other tourism-dependent island countries, its business tax-to-GDP ratio has been hovering around 4.25-5.5 percent, down from a peak at 7.1 percent in 2011.
It indicated that the country should limit tax incentives for tourism-related companies, saying that the policies including taxing businesses in the sector at a rate of 15 percent, compared with 30 percent to 33 percent for other companies, had reduced tax collections by 0.5 percent of GDP.
Elsewhere the IMF welcomed the country’s plans for a property tax but said that it should be “non-discriminatory and should minimize distortions.” Seychelles is also considering the introduction of a sugar tax in its November budget and has delayed the introduction of a progressive personal income tax until January 1, 2018.
Seychelles announced significant reforms in its December 2016 Budget, including the introduction of a new property tax will be introduced on land ownership in Seychelles, to be levied only on foreigners, and purchases of private land by foreigners will also attract a high stamp duty. There were also comprehensive changes proposed covering the personal and corporate income tax regimes.