Reforms move to second stage, focus on taxes
22.06.2009
Our economic reforms have moved into their second phase and are focusing on modernising the tax system and the review of our public enterprises, Finance Minister Danny Faure said on Friday.
The reforms are on track and the last review by an International Monetary Fund team is being presented before the organisation’s board, the minister told representatives of all the country’s media houses in a press conference.
He made a statement and together with principal secretary for finance Ahmed Afif and Central Bank governor Pierre Laporte answered questions from journalists.
“We’ve announced the principles that will guide the tax reforms based on creating a fair playing field,” he said.
“In 2012 we will have a goods and services tax based on a value added tax and in June next year we will introduce a personal income tax.”
Business tax at the moment stands at 40% and is due to be reduced to an appropriate level to be determined by technicians and announced in the 2010 budget presentation, he said.
Minister Faure said the changes will require new laws for which experts and a National Assembly committee will be working on together with our partners and the private sector.
The new tax systems will aim at fairness correcting inequalities certain sectors for example within tourism have complained about.
“We will also speed up talks with various operators who are today benefitting from the Tourism Incentives Act because we have decided to put a limit on them.”
Minister Faure said some operators within the tourism industry have said they are not getting a fair deal with regard to how they are paying their business and social security taxes.
“These are the anomalies that are being corrected. For example the government had given permits to operators to bring in certain commodities for them to give to the tourism industry because of the shortages of foreign exchange we used to have. Today with the new reforms that have brought in forex in the banks we have decided the same system should not continue because we have businesses in the country who also import goods to benefit the population but they are not getting the same treatment those in the import zone are getting.
“So these special import permits are being abolished from July next year.”
The minister said management audit of the major parastatals continues and a number of them -- for example Air Seychelles, the Public Utilities Corporation and the Seychelles Public Transport Corporation -- have already got their audit reports with their recommendations.