Africa-Press – Seychelles. A third Bill was considered and approved by the National Assembly yesterday, namely, the Income and Non-Monetary Benefits Tax (Amendment) Bill 2022.
The Bill provides for numerous amendments to the Income and Non-Monetary Benefits Tax Act (Cap 273), and is in the interest of employees.
In the instance that an employee is to benefit from ‘backpay’, the current legislation means the employee is taxed based on the final amount which they are being paid in the month that the payment is effected, resulting in a bigger tax deduction. As a solution, the amendment is to apply to section 5 of the 2010 Act, and makes provisions for the tax deduction to be what it would have been if the payment was effected in the month for which payment was due.
Secondly, amendments are to apply to Schedule 4, which makes provisions for certain non-monetary benefits from which employees may benefit in the course of employment, or based on performance. The current law provides for employers to pay to the Seychelles Revenue Commission (SRC) a total of 20 percent, the value of non-monetary benefits, such as accommodation and company vehicles. As announced in the 2023 budget, as from January 1, 2023, this tax rate is to reduce from 20 percent to 15 percent, as found in Schedule 3.
Additional exemptions are provided for in the Bill, meaning no taxes will apply to benefits, namely, food provided to employees, medical expenses, education for employees’ children, education and training for employees themselves, and transportation to and from home.
“Government has reviewed these benefits, especially those that have a direct, positive impact for our employees. We recognise that many employers are already providing such benefits, and expect that others will also do the same,” Vice-President Ahmed Afif stated, in presenting the Bill.
Despite expressing his support for the Bill, Honourable Wallace Cosgrow proposed that the exemptions be extended, noting that the exemptions relate mainly to the tourism and construction sectors.
Leader of the Opposition in the National Assembly, Sebastien Pillay, shared a similar perspective.
For his part, Honourable Sathya Naidu said the amendment leaves space for businesses to pass on benefits to their employees, and for employees to in turn perform better, in the interest of the organisation.
The Bill was approved as amended by 23 votes.
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