The Vat is a tax on certain types of businesses which is not aimed at collecting more money than the government is getting now and should therefore not have an effect on consumers.
It will be compulsory for firms with annual turnover above R5 million but voluntary for those earning less.

Vice-President Danny Faure – who is also the Minister for Finance and Commerce – announced this in an interview yesterday.

He said the Seychelles Revenue commission has put in place a detailed plan of execution which the businesses and members of the public will be educated about from now onwards.

Mr Faure said an International Monetary Fund expert will be based in Seychelles advising on the implementation of the tax – which is the last in the series of tax reforms started three years ago.

“When launched the reform three years ago it was very clear our aim was to broaden the base and have a tax system that is fair, with equity in the system,” said Mr Faure.

“There were distortions in the system. It has taken us almost two years and gradually we are not far from the central objective set by government.

“We have introduced the Business Tax and have the Income Tax as well as the Excise Tax,” he said.

In December Mr Faure presented the VAT law to the National Assembly and that law is now in force.

“We will introduce the Vat in July 2012 because we want the population and the business community to be prepared and this is why today we are announcing the level and starting the education programme,” he said.

Nation hopes to give further details about the announcement in our next issue tomorrow.