The MNA for Anse Etoile, Ahmed Afif, who was once Principal Secretary for Finance, could not let the chance of scrutinizing the ministerial nominees last week, to show how savvy he is on financial and taxation issues.
Quizzing Dr Peter Larose - who has
since been appointed Minister of Finance,
Afif let out that he is against the
new Progressive Income Tax System.
In the past, the opposition, notably the
SNP has always advocated such a system
and in fact when Government announced
the new mechanism, it was quick to
scream that “another of their ideas had
Yet, last Wednesday, Ahmed Afif told
the National Assembly that the new tax
laws would return the country to the old
complicated system that the IMF had
criticised at the start of the economic
reform programme, which
was in October 2008.
Afif said that: “The IMF said at
the time that our tax system was
too complicated and advocated a
more equitable system by applying
a flat rate of 15% across the
Afif went on: “That made payroll
easy and was a much fairer
So that, according to Afif means
that the low-income earners of
just R5,000 per month should pay
the same tax rate of 15% as those earning over R80,000 monthly.
In February this year, the Finance Ministry
announced a new system to replace
the old one - with a flat rate of 15% -
which had been in force since 2010.
Under the new progressive tax system,
no tax at all is applied on the first R8,
555.00 -whatever the salary.
A rate of 15% is applied on incomes of
between R8555 and R10, 001. Incomes
are then taxed progressively higher until
R83, 333 monthly when tax is 30%.
However, the progressive tax system
does not apply to expatriate workers.
Commenting on the new system, Finance
Principal Secretary Patrick Payet
said “it is a fair system as workers earning
up to R35, 667 monthly will see an increase
in the amount of money they take
home, after their personal income tax has
Payet said that over 90% of Seychelles
workforce will benefit under the new system.
Seychelles’ workforce is presently
46,000, of which 25% is expatriate labour.
Government stands to lose up to R 400
million yearly with the new tax system.
Payet said Government plans to offset
that by reviewing its process to make
them more efficient. It shall also review
the Business Tax and Customs Services
to ensure the right tax rates are applied.