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Government disappointed with EU for listing Seychelles as a non-cooperative jurisdiction on taxation |20 February 2020

Government disappointed with EU for listing Seychelles as a non-cooperative jurisdiction on taxation

President Faure chairing the high-level economic forum yesterday (Photo: Louis Toussaint)

The government has expressed its disappointment with the Council of the European Union for adding Seychelles to its list of non-cooperative jurisdiction on tax issues and this in spite of the country’s continuous effort to improve its taxation systems and regulatory frameworks in order to meet stringent international requirements.

In a high-level economic forum at State House chaired by President Danny Faure yesterday morning, key actors in the financial sector, including the minister responsible for finance as well as the Attorney General, informed the President of the situation and what is happening now a day after the Council of the European Union issued a press release in which it informs the world that Seychelles along with the Cayman Islands, Palau and Panama have joined eight other jurisdictions already on the list.

Speaking to the press after the lengthy meeting, the secretary of state for Finance, Patrick Payet, expressed the government’s disappointment stating that the Council has not taken due consideration for Seychelles effort, engagement and commitment to improving its tax systems.

“In 2017 Seychelles was assessed by the European Union (EU) and the Organisation for Economic Co-operation and Development (OECD) as per the Base Erosion Profit Shifting (BEPS) project being carried out with the OECD. They assessed and advised us on our non-compliance with nine of our professional tax regimes,” SS Payet explained.

He noted that Seychelles agreed with the two international bodies to amend the tax and other related legislations to be in conformity with their standards.

“But they came back at the end of 2018 to advise us that in regard to the Seychelles International Trade Zone, there were still some preferential regimes that needed to be addressed. Together we agreed that we would carry out the necessary amendments by December 2019 which we did and sent them a copy of the legislation which they agreed to,” SS Payet stated. But he pointed out that they came back and advised us that based on the territorial tax system that we have, we are encouraging non-double taxation and this is why we agreed with them to amend our laws but stressed that we need to see proper guidelines put in place. But SS Payet said they did come up with the guidelines in September last year but went on to amend it further early December.

“This is why we requested for an extension period from the EU until June 2020 to allow us time to amend our legislation but the extension was denied,” he pointed out.

“We went on to insist with them on the complexity of the process to be followed including consultation, drafting, presentation to the National Assembly and as a result asked for March 31 deadline, a request which was not answered,” said SS Payet. But he noted that the government continued to follow the process to be able to amend our tax laws by the end of March 31.

“We are disappointed with the EU because we have seen that it has granted extension to certain countries while others like Seychelles their requests have been denied. But however we will continue to be in touch with them to ensure that when we complete the process of amending our laws Seychelles will be removed from the list,” SS Payet remarked.

SS Payet further stated that as a small jurisdiction with very limited resources we also face a lot of challenges and our plight should not be compared with large jurisdictions like Singapore and Hong Kong for instance which even though they have a territorial tax system similar to ours they are not included as part of the whole process of being assessed.

“This is why we say even though we do understand the EU guidelines, we do feel that they should have a standard that is applicable across the board,” SS Payet stressed.

The meeting yesterday also discussed various other related matters including the recent black listing of Seychelles by the French government, the need for the international bodies to have an office and a liaison person based here to foster better understanding and more clarity on the different guidelines among other matters.

But SS Payet stated that Seychelles remains committed in its engagement to continue amending its tax laws.

He said a team from Seychelles will go to Luxembourg next week to discuss with different international authorities various tax related reforms, weaknesses in our legislations, what we are doing to address them, exchange of information among other related matters.

 

Marie-Anne Lepathy

 

 

 

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