THE PEOPLE Newspaper | June 03 2015 | Vol. 3 No. 19: The Seychelles Revenue Commission (SRC) and Customs are carrying out investigations into incidents of breach of licences and tax evasion in the yacht operations business, the Minister for Finance, Trade and the Blue Economy Jean-Paul Adam said in the Assembly on Tuesday this week.
Minister Adam said it is unfortunate that there are operators who are not ensuring that information relating to their business activities required by government is duly provided. There are concerns over yacht owners overstaying on their temporary stay requests thus avoiding to pay the necessary taxes, and also that some of these yachts are also involved in illegal chartering.
I note that in December last year the then Minister for Finance Pierre Laporte in his 2015 Budget speech said “Due to abuses and a lack of control in the sector, government intends to review its approach “to the issue of importation, taxation and licensing of yachts and leisure boats”.
But I have found out that the Seychelles has been an “offshore” haven for the ownership and registration of yachts. A Seychelles citizen or company -International Business Company (IBC) or domestic company must own a yacht in order for it to fly the Seychelles flag. An IBC is the most popular mechanism for offshore ownership of a Seychelles-registered vessel
An IBC-owned yacht is exempt from any Seychelles taxation on profits and dividends. Sale and transfer of Seychelles-registered vessels or the companies owning them are also free of tax, as are the salaries of officers and crew of Seychelles-registered vessels operating internationally. No estate duty is payable on the inheritance of shares of a Seychelles flag vessel owning offshore company
As a result this sub-sector has grown rapidly and yacht companies and individuals have made millions and millions of Dollars but contributed little to the economy because they have not paid taxes. Many Seychellois businessmen feel this is blatantly unfair especially in a situation where small to medium sized Seychellois businesses are being taxed. Minister Adam also said in the National Assembly that the government is considering introducing legislation which will allow for yachts to be registered in a systematic manner so they could benefit under the differed payment system and they would be in conformity with the law. The government is also reviewing the tax system for chartered yachts.
At Nature Seychelles we are extremely concerned that yacht charter business and owners are not paying taxes because the yacht industry has a heavy impact on the environment. Not only is anchor damage to sensitive marine ecosystems like coral reefs a big problem but as I alerted the public and government some years ago through the media, many are not handling the sewage on board properly. My article in The People newspaper came out in the wake of the first shark attack at Anse Lazio on Praslin where I said I had seen sewage coming out from many yachts moored at Anse Lazio. I speculated that the sewage could be attracting sharks. What happens to the solid waste is anybody’s guess. The yacht industry should also be paying the Corporate Social Responsibility Tax (CSR) but apparently various operators are not doing so. This is very unfair and swift action must be taken.
by Nirmal Shah