Bill 36 2022 - Income and Non-Monetary Benefits Tax (Amendment) Bill 2022

[30th Nove m b e r 2 0 2 2 ] Inco me and Non-Monetary Benefits Tax 1 (Amendment) Bill, 2022 REPUBLIC OF SEYCHELLES SUPPLEMENT TO OFFICIAL GAZETTE BILL INCOME AND NON-MONETARY BENEFITS TAX (AMENDMENT) BILL, 2022 (Bill No.36 of 2022) OBJECTS AND REASONS This Bill seeks to amend the Income and Non-Monetary Benefits Tax Act (Cap 273) and in particular, the provisions covering the rate and taxation of non-monetary benefits. To this end, the Bill propose a new regime of taxation of non-monetary benefits from the “fair market value of the non-monetary benefits” to the “actual value or the taxable value of the non-monetary benefits. Dated this 29th day of November, 2022. NAADIR HASSAN MINISTER OF FINANCE, NATIONAL PLANNING AND TRADE ——————— [30th Nove m b e r 2 0 2 2 ] Inco me and Non-Monetary Benefits Tax 2 (Amendment) Bill, 2022 REPUBLIC OF SEYCHELLES SUPPLEMENT TO OFFICIAL GAZETTE BILL INCOME AND NON-MONETARY BENEFITS TAX (AMENDMENT) BILL, 2022 (Bill No. 36 of 2022) A BILL FOR AN ACT TO AMEND THE INCOME AND NON-MONETARY BENEFITS TAX ACT, (CAP 273). ENACTED by the President and the National Assembly. Short title 1. This Act may be cited as the Income and Non-Monetary Benefits Tax (Amendment) Act, 2022. [30th Nove m b e r 2 0 2 2 ] Inco me and Non-Monetary Benefits Tax 3 (Amendment) Bill, 2022 REPUBLIC OF SEYCHELLES SUPPLEMENT TO OFFICIAL GAZETTE BILL Amendment of section 2 2. Section 2 of the Income and Non-Monetary Benefits Tax Act, (Cap 273), in this Act referred to as the “principal Act” is amended by repealing the definition of “fair market value”. Amendment of section 4 3.(1) Section 4 of the principal Act is amended by repealing subsection (5) and substituting it with the following — “(5) The tax imposed under subsection (2) is imposed on the actual cost or the taxable value of non-monetary benefits.” Amendment of section 5 4. Section 5 of the principal Act is amended by inserting the following new subsection after subsection (5) — “(6) Notwithstanding subsections (1) and (2), an emolument received in arrears by an employed person from an employer shall be attributed to the month from which the emolument was due to be paid and the employer shall withhold tax at the rate specified in the First Schedule as if the emolument received in arrears was received in the month to which the emolument is attributed.” Repeal and replacement of Third Schedule 5. The Third Schedule to the principal Act is repealed and replaced with the following new Schedule — “THIRD SCHEDULE Section 4(2) Rate of tax payable by employers in respect of non- monetary benefits 1. An employer shall be liable to pay tax at the rate of 15% of the actual cost or the taxable value of a non-monetary [30th Nove m b e r 2 0 2 2 ] Inco me and Non-Monetary Benefits Tax 4 (Amendment) Bill, 2022 REPUBLIC OF SEYCHELLES SUPPLEMENT TO OFFICIAL GAZETTE BILL benefit provided to an employed person and such tax shall be computed in accordance with the Act in respect of each non-monetary benefit provided to the person employed.” Amendment of Fourth Schedule 6. The fourth Schedule to the principal Act is amended — (a) by repealing the table under paragraph 1 and substituting it with the following new table — FOURTH SCHEDULE Taxation of Non-Monetary Benefits 1. Taxation of non-monetary benefits Item Type of benefit Taxable Value Exemptions/ Exception provided to or on behalf of an employed person 1 Accommodation Type Per month Per employed (a) The provision of person (SR) accommodation for business purposes if (a) Onsite shelter 300 the period of the (b) Dormitory accommodation 600 a c c o mmodation is (c) One bedroom dwelling 2,500 t h r e e months or less. (d) Two bedroom dwelling 3,000 (e) Three bedroom dwelling 4,000 (b) The provision of (f) Four bedroom dwelling 5,000 a c c o m m o d a t i o n to an employed person in the construction and tourism sector. [30th Nove m b e r 2 0 2 2 ] Inco me and Non-Monetary Benefits Tax 5 (Amendment) Bill, 2022 REPUBLIC OF SEYCHELLES SUPPLEMENT TO OFFICIAL GAZETTE BILL 2 Utilities benefits Full cost incurred by the Utilities benefit provided to an includes utility bills employer employed person of the tourism such as electricity, sector water, telephone, cable tv, or home internet access 3 Provision of clothing Identifiable uniforms or safety clothing or protective clothing 4 In-house benefit Full cost incurred by the Provided the total benefit in any (perquisites) employer one month does not exceed 20% of basic salary. 5 Meals The cost incurred in providing meals to an employed person 6 Motor Vehicle (a) Full cost incurred on fuel (a) Not an employed persons and renting of motor benefit to the extent that: vehicle - A vehicle logbook is maintained and the logbook substantiates that (b) Where an employer owns the employed person is in a motor vehicle and fact called out for provision is made for it afterhours duties on a to be used by the regular basis employee, the taxable value will be SR600 per (b) Private motor vehicle day. provided to an employed person in the tourism sector for the purpose of home to work travel 7 Medical Expenses (a) To exempt medical fees in regards to medical tests relating to employing foreign workers. (b) Medical expenses incurred by employers on behalf of an employed person. 8 Life Insurance Full cost incurred by employer 9 Health Insurance Applied to all employed persons. [30th Nove m b e r 2 0 2 2 ] Inco me and Non-Monetary Benefits Tax 6 (Amendment) Bill, 2022 REPUBLIC OF SEYCHELLES SUPPLEMENT TO OFFICIAL GAZETTE BILL 10 Insurance e.g. To exempt tax on the cost incurred house and content, of the insurance benefit provided to income protection, employees so as to encourage motor vehicle or employers to insure the house, motor fire and burglary vehicles and other content of their insurance employees in case of burglary or fire disasters. 11 Transport to/from Transportation cost provided to work (excluding employed persons for the purpose of motor vehicle) home to work travel. 12 Airline and ferry Full cost incurred by employer Exemptions will be granted: transport - when the transportation services of airline/ferry both domestically/ internationally is provided to an employed person for business or work purposes. - If the itinerary for the trip including proof for grounds of travel is provided. 13 Tuition fees and Full cost incurred by employer An employed person whose training training cost is limited to that provided by certified institutions recognised by the Seychelles Qualifications Authority, shall be eligible for exemption from tax on the following — 1. Class fees, registration, book fees, examination fees and assessment fees; 2. Airfares for the first travel from the Seychelles to the place of study and for the last travel form the place of study to the Seychelles. 3. Bus pass for local studen ts. Where an employer pays an employees' children's school fees, the full cost incurred will be exempted. 14 Employer Full cost incurred by employer contribution towards private pension