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Seychelles will finalize significant reforms to its main taxes in 2017, according to the territory's newly released Budget.
The territory will complete the introduction of a progressive personal income tax regime from July 1, 2017, rather than January 1, 2017. A SCR8,555.50 (USD660) tax-exempt threshold will be introduced, but it will not be available to expatriates. Income tax above that threshold will be subject to progressive rates of either 15 percent, 20 percent, or 30 percent.
From July 1, 2017, 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. The stamp duty will be charged per square meter, but further details of the new tax are still under consideration.
The Government is also proposing to change the Business Tax Act. The tax-free threshold for individual businesses, such as sole traders or partners, will remain at SCR150,000. However to align personal income tax (PIT) and individual business tax rates, the tax rate on profits of between SCR150,000 to SCR1m will be increased from 15 percent to 20 percent. Profits above SCR1m will continue to be taxed at 33 percent.
In addition, the Government is proposing that the presumptive tax rate will be realigned. The tax rate on businesses with a turnover of up to SCR0.5m is to remain at 1.5 percent, but a three percent tax will be imposed on businesses with a turnover from SCR0.5m. The new cap for the presumptive tax is proposed to rise to SCR2m, up from SCR1m. Professional taxpayers, such as accountants and engineers, will pay a five percent rate.
Included in a substantial series of measures to help small and medium-sized enterprises (SMEs), the Government will exempt businesses with an annual gross revenue of up to SCR1m from paying tax in their first year of operation. Larose said that the medium- to long-term target is "to turn Seychelles into the SME capital of the Indian Ocean."
Larose also announced an additional cost for foreign visitors disembarking at the Seychelles International Airport. As from July 1, 2017, the Seychelles Civil Aviation Authority will impose an additional USD10 passenger service fee. He added that "the collection will be a direct contribution towards the country's foreign exchange earnings to maintain the high standard of the Airport."
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