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Increase in GST Rate on Scheduled Tourism Service Providers

Good and Services Tax (GST) was introduced in July 2003. The tax on scheduled tourism services calculated at the rate specified in Schedule 2, Part 2 of the GST Regulations, was initially at 7%, except for airline and helicopter transport services which was at 15%. In 2007, the GST rate for helicopter transport services was changed from 15% to 7%. But since November 2008, tourism service providers have been liable to a GST rate of 10%.

Will there be a change in the GST rate for tourism service providers this year?
The Minister of Finance announced in his 2009 budget that the rate of GST for tourism service providers will increase from 10% to 12% in 2010.

What is the specific effective date for the new GST rate?
The new GST rate of 12% becomes effective 1 November 2010. However, it is important to note that services provided to clients prior to 1 November 2010, where actual payment for the service was received on or before 1 November 2010, the GST liability will be limited to the existing rate of 10%. It is important that proper records are kept of all services provided prior to 1 November 2010 and paid at the old rate of 10%.

Who are the tourism service providers to be affected?
The following tourism service providers as per schedule 2, part 2 of the GST Regulation 2003 will be liable to the new GST rate of 12%:
  • Hotel, Guesthouse or Self-Catering Establishment
  • Café or Restaurant
  • Airline Transport Services
  • Fixed Rotary Wing Air Transport Services
  • Domestic Ferry Services
  • Boat or Yacht Charter Services (including a liveaboard)
  • Car Hire Operator
  • Underwater Dive Operator or Dive Centre
  • Water Sports Operator
  • Travel Agent (Own Services)
  • Tour Operator (Own Services)
  • Tour Guide and or Tourist Guide
  • Equestrian Operator

How to calculate the GST with the new rate of 12%?
GST on services is calculated on the receipted amount of the services as follows:

Receipted Amount - ( Receipted Amount/1.12 )

For example if the sale/income for a given month is SR10, 000, the GST due is as follows:

SR10,000 – ( SR10,000/1.12 ) = SR1, 071.43

This amount has to be remitted to the Seychelles Revenue Commission, using the Business Activity Statement, on or before the 21st of each month.

Where do I go for more information?
Should you require further information or clarification on the applicability of the new GST rate, please contact SRC Advisory Centre in Room 2 at Oceangate House or telephone 293741/293742/293743.

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