Economic Reforms To Continue In Seychelles

By Editorial 25 May, 2011

James Michel has been successful in his bid for a second full term as President of the Seychelles after beating three opposition candidates. It is expected that Michel will continue the economic reforms set in place over recent years, and that this will include floating the Seychelles rupee against major currencies and continuing an overhaul of the country’s tax system.

Despite some accusations of corruption from Michel’s main rival, Wavel Ramkalawan, an Anglican priest, it was reported that voting was peaceful and orderly. The majority of the 70,000 registered voters live on the three main islands, and those living on the more than 100 other islands cast their vote over a period of days prior to the final day of polling.

In his address to the nation immediately following the results, Michel said: “We will create this New Seychelles together, in peace and harmony, respectful of the diversity of opinions, and we will put our differences aside, and build the New Seychelles together.” He vowed to press on with reforms to improve the country’s economy.

An International Monetary Fund (IMF) mission to the Seychelles was completed earlier this year and it was noted then that the modernization of the tax system was continuing, including important steps toward the launching of a value-added tax (VAT), scheduled for mid-2012.

The Seychelles government had said previously that the introduction of the VAT was aimed at “improving integration in the economy, broadening of the base, elimination of cascading, and increased efficiency and fairness."

The Seychelles has over the last year been implementing comprehensive reforms aimed at further rationalizing the tax system and harmonizing rates across sectors.

The personal income tax rate was reduced from 18.75% to 15%, effective from October 1 last year, and from January 1, this year, there has been an increase from 10% in the personal income tax rate paid by expatriates, giving one harmonized rate of personal income tax for all employees in all sectors.

Tags: Expatriates | Tax | Investment | Value Added Tax (VAT) | Law | Financial Services | International Monetary Fund (IMF) | Offshore | Individual Income Tax | Seychelles | Services |


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