Tax defaulters offered grace period to clear their debts |04 June 2021

(L to r) Mrs Herminie. Ms Verghese and Minister Hassan during the press interview (Photo: Jude Morel)

Any registered entity that are in arrears with their tax payments to the Seychelles Revenue Commission (SRC) will be granted a six-month grace period as from July 1, 2021, to settle the amount owed and benefit from a waiver on accrued interests.

The announcement, among two tax initiatives, was made by the Minister for Finance, Economic Planning and Trade, Naadir Hassan, in a press interview earlier this week at the ministry’s headquarters, Liberty House.

Also present were the commissioner general for SRC, Veronique Herminie, and the director general tax and financial sector, policy division, Seyline Verghese.

Minister Hassan said that the tax amnesty programme, a common method used especially in times of crisis, is to encourage tax payers in default of their tax payments to come forward and pay up and benefit from a reduction on penalties and accrued interest.

The second initiative the minister talked about was an amendment to the SRC’s Revenue Administration Act for the permanent inclusion for the ‘Wright-off' of Debts’ for special circumstances.

He said the law to be put forward for approval by the National Assembly will also put in place a procedural manner in terms of how it (law) will be administered while ensuring that the decision is taken collectively and not by one person only. He also said that the decision will be published by notice with a provision also to allow for reverse of decision in case of an objection. The law will also allow the tax commissioner to waive interests as she has only the power to waive penalties in the existing law.

Elaborating further on the two initiatives, Ms Verghese said the tax amnesty waiver programme, which will not be permanent, will cover all taxes for a duration of six months as from July 1, 2021 to December 31, 2021.

She stated that waiver on interest will vary as from when the due is paid. If payment is made between July and August, the waiver will be 75% and payment made between September to October the person will benefit from a waiver of 50%. From November to December, 2021, the tax waiver on the interest will be 25%. For penalties the waiver will be 100% during the six-month grace period.

Ms Verghese said that among tax payers targeted for the programme are firstly those who have lodged their returns but have never paid, secondly those who have lodged and paid their returns but have under declared their income and thirdly those who have never lodged a return.

She noted that such amnesty programme was carried out in 2015 where R21 million were collected but back then the amnesty was only on the waiver of penalties and not on the waiver of interests.

On the  ‘Wright-off of Debts’, Ms Verghese said that the scheme, through terms and conditions, will cater for specific circumstances with regard to serious hardship (bankruptcy, terminal illness, death), economical debt (if the money used to recover the debt owed is more than the money to gain) and if the business has gone through legal liquidation process.

She noted that in case of a dead person passing over his or her assets (land) to heirs, the latter will be responsible for paying the taxes owed.

Ms Verghese said that the ‘Wright-off of Debts’, which will not be automatic, will be discussed by an internal committee, including representatives from the Ministry of Finance, before their decisions are reviewed by the commissioner general of SRC for proposals to the finance minister who will have the authority to approve for the commissioner general to right off the debt.

SRC’s commissioner general, Veronique Herminie, said the objective of such amnesty programme is to reduce as much as possible some debts out of their log book which currently stands at R1.034 billion.

She said that while SRC wants to give a lifeline to businesses in this time of the pandemic, it also wants to retrieve some money to help the government with its expenses, also in this time of the pandemic.

Mrs Herminie stated that out of the above amount owed, R437 million are related to penalties and interests.

She said that SRC is targeting to retrieve some of that money that could take years to get by normal procedures given the fact new penalties and new interests will continue to come in.

She added that to benefit for the amnesty, the liability debt has to be paid in full with no room for negotiations for payment by installments.

She added that failing to seize the given opportunity, SRC will carry on with its normal procedures of adding interests and penalties on owed debts.

She noted that SRC is set to collect R30 million from primary tax and around R215 million (50%) from the penalties and interests waiver amnesty.

With regard to the  ‘Wright-off' of Debts’ initiative, Mrs Herminie said that the debt to be written off stands at R30.4 million, representing 52 cases.

She called on entities to take the opportunity offered to clear their debt to avoid further complications with regard to their payment.

Patrick Joubert