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VAT to replace GST

On July 1st 2012, VAT will be introduced and will replace the current GST. This means that VAT will NOT be an additional tax. On July 1st 2012 when VAT becomes operational GST will no longer be applicable.

VAT has the same rate as the GST rate which is 15% and has effectively the same effects — on prices — for households and final consumers. VAT will apply on most of the goods sold and imported as well as on services supplied in Seychelles.

However, the law has prescribed an extensive list of goods and services that are VAT exempted (meaning that no VAT will be charged on their importation and/or sale). The majority of these items are currently exempted from GST today, such as rice, flour, lentils, local fish, sunflower oil, salt, sugar, infant formulae, pharmaceutical products, fuel etc..... Some additional items have been added to the list which means that more goods will be exempted under VAT, such as all types of vegetables and fruits, imported meat and fish, and other types of edible oil.

The importation of journals, periodicals, magazines and newspapers not to be used for resale; documents of no commercial value and; trade and promotional materials not exceeding SR 1000, will also be exempted under VAT.

Regarding exempt supplies, the list comprises among others educational, government hospital, medical and dental, financial, life insurance premiums.

Electricity and water supplied by PUC will also be VAT exempted and so will the produce and catch made by individual farmers and fishermen respectively.

The entire list of these goods and services that will be VAT exempted can be found in the first schedule of the VAT ACT.

Small businesses can opt to stay out of the VAT scope
The VAT Act has also prescribed a registration threshold to ensure that most of the small businesses will be out of the VAT scope. Small businesses with an annual turnover that is below SR 5million are not obligated to register for VAT. However, if they wish to do so, they can register on a voluntary basis.

It is important to note however that a business that is not registered for VAT will not be able to charge VAT on its sale to its customers. This means that those small businesses that decide not to register for VAT will not incorporate VAT in the prices of their goods and services – their sale will be without VAT (VAT exclusive). Consequently most of the small retailers, individual farmers and fishermen will not charge VAT on their sales.

Consumers can check at any time whether a business is VAT registered or not. A business that is VAT registered will be required to display the VAT Registration certificate in a visible place within the business’ premises. Alternatively Seychelles Revenue Commission may be contacted on 4293737 or by email at

In addition, SRC with the Office of Fair Trading and other relevant authorities will work together to ensure that non-registered businesses do not unduly charge VAT and/or artificially increase their selling price under the guise that VAT is the cause of such an increase.

For more information
You can contact Seychelles Revenue Commission on 4293737 or email us at
The Value Added Tax Act, 2010 is available here.

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