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Today’s Top Headlines

Seychelles Announces Personal Income Tax Reform

by Lorys Charalambous,, Cyprus

24 February 2016

The President of the Seychelles, James Alix Michel, has confirmed that changes will be made to the personal income tax system, designed to make taxation "fairer and more equitable."

In his recent State of the Nation address, Michel foreshadowed reforms designed to reduce the tax burden on low-income earners and make the personal income tax system more progressive.

Under the changes, from July 2016, individuals earning up to SCR8,555.50 (USD553.74) per month will not pay any income tax. Then, from January 2017, the first SCR8,555.50 in earnings will be subject to tax at 0 percent.

Michel also announced in his address that the Ministry of Finance will undertake a review of the tax system to determine how the Government can "maximize its revenue" and reduce tax evasion in certain economic sectors.

The measures form part of the Government's medium-term fiscal framework agreed with the International Monetary Fund, which is designed to stabilize the Government's finances and reduce public debt.

The medium-term fiscal strategy was first put in place in 2008 following a default in debt payments. The plan includes an IMF-agreed target to cut its debt-to-gross domestic product to below 50 percent by 2018.

The IMF said following the completion of its third review of the Seychelles' Extended Fund Facility (EFF) that good progress is being made by the Government towards reducing the public debt burden, with the 2015 budget surplus expected to be around four percent of GDP.

The Seychelles has received approximately USD9.1m in monetary assistance from the IMF under the EFF arrangement approved in July 2014.

TAGS: individuals | Finance | tax | budget | International Monetary Fund (IMF) | tax reform | individual income tax | Seychelles

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