SRC introduces new ‘Pay as You Earn’ scheme to relieve businesses from annual payment pressure |18 January 2022

Ms Jeremie (left) and Ms Andre during the press interview (Phot: Thomas Meriton)

The Seychelles Revenue Commission has introduced a tax payment scheme ‘Pay As You Earn’ as a pilot project for 2022 for businesses falling under the Presumptive Tax Regime.

The scheme, effective January 1, 2022, aims to encourage businesses currently operating under the ‘informal sector’ to register for tax purposes. It will allow those businesses, which will fall under the Presumptive Tax Regime, to pay their tax as and when they receive an income thus providing much relief from the potential financial burden at the end of the tax year.

In an interview yesterday afternoon, Gayathri Andre, the director for tax payer service from the Tax Division of the Seychelles Revenue Commission (SRC) and Nadia Jeremie, the manager for the Revenue Section, gave more details on the new scheme to the local press.

Ms Andre explained that the newly introduced ‘Pay as You Earn’ scheme effective January 1, 2022 is a pilot project which aims to give a chance to small businesses which falls under the Presumptive Tax Regime.

“Basically the Presumptive Tax Regime is for small businesses whose annual turnover is less than R1 million. It provides them with a facility which is easier for them instead of paying a bulk sum on their revenue at the end of the year. With the new scheme we give them the chance to come forward voluntarily to pay their tax on revenue received every month on which the tax rate is 1.5%,” Ms Andre explained.

“Once they make the monthly payments, at the end of the year they will not have any payments to make but they will still have to do their annual Presumptive Tax Return in which they will make a reconciliation to review the payments they have already made. In the event that they have made a mistake or missed a payment, they could make the adjustment when they make the annual return,” Ms Andre further detailed.

Ms Andre noted that there are around 10,100 businesses who fall under the regime and so far for 2021 the Tax Division has collected around R16.1 million. She further remarked that there are many more businesses out there mainly from the informal sector which are reluctant to come forward to pay their taxes and the ‘Pay As You Earn’ is a way to encourage and facilitate them to register with the SRC to pay their tax monthly.

Ms Andre went on to remark that many small businesses struggle to pay their annual tax return at the end of the year so this new scheme will reduce the pressure on them and be a relief for them.

With regard to payment procedures Ms Jeremie explained that there are a few businesses which are paying their taxes as they earn some revenue as this is an effective way to reduce pressure on them as well as on the SRC.

She noted that the businesses have the option to make monthly payments, make payments every two, three or six months and those who want to continue making their yearly payments the option still remains.

“There will be no penalties on people doing their payments in advance. We are encouraging businesses to use the different payment facilities which include standing orders, bank transfers which are done in Account Number 1401 at the Central Bank of Seychelles. It is important for businesses when doing payment through bank transfers to include their Tax Identification Number (TIN) and to specify the type of payment being carried out,” Ms Jeremie explained.

Ms Jeremie said the SRC has designed an additional form for the advanced payments.

She said taxpayers will need to complete and submit the ‘Advance Payment BAS’ when effecting payment to facilitate reconciliation.

There are no payment deadlines which mean that payment can be made any day and any time during working hours physically at the SRC offices on Mahé, Praslin and La Digue.

Businesses that are exempted from the scheme are those categorised as ‘specified businesses’ and which are using the Deduction at Source (DAS) booklet as well as businesses that are currently paying the monthly ‘Pay as You Go (PAYG) under the normal tax regime.

Compiled by Marie-Anne Lepathy