Last week we wrote an article under the title: “Three Sites For Ephelia Workers Temporary Accommodation”. At the very end of the article we wrote: “This publication is working on a report soon to be published detailing the various concessions termed “incentives” by the President’s Office awarded to both Corvina Investment Co Ltd and Sanken Overseas (PVT) Ltd for Ephelia Resort, during both phase of development, construction and when operational”. This week we bring part of the report on Corvina Investment Co Ltd.
In a letter dated 21 June 2006 addressed to Jean G. Weeling-Lee, a director on the board of Corvina Investment Co Ltd the Department Of Finance operating under the President’s Office wrote:
Dear Mr. Weeling,
Re: Incentives for – Project on Ephelia
Further to our letter dated 5th June 2006, regarding the above-mentioned, the Department of Finance would like to confirm the following additional incentives.
*(note the word additional here)
Incentives during Construction Phase
During the construction phase, the following concessions will be available to the promoter. *(The promoter being Corvina in that particular case)
These concessions can be passed on to the designated main contractor.
*(The main contractor being Sanken Overseas (PVT) Ltd)
Trades Tax and GST exemption on *(by exemption they mean; zero, nil, nothing, duty free)
a) Construction materials, fitting & fixtures as per Bill of Quantities
b) Tools, plants and equipment specifically imported for use on the (tourism development) construction site.
c) Commercial vehicles not exceeding 1.5 tons;
d) i) Trades Tax exemption (only) for up to 2 vehicles for on site Project Design and Management teams. GST on vehicle (s) would be payable
ii) Trades Tax exemption (only) for up to 4 vehicles for the designated main contractor. GST on the vehicle (s) would be payable
e) Fuel
Trades Tax exemption on fuel (diesel only) for plant and equipment based on the construction phase. A list of plant & equipment must be submitted to Seychelles Investment Bureau for approval.
Upon completion of the project or if removed from or applied for other purposes other than which this concession has been granted the deferred taxes will become payable.
a) For Seychellois workers:
Employers Social Security Contribution capped at 20%
Employees’ Social Security Contribution at 5%.
For non-Seychellois workers.
Employers Social Security Contribution for foreign employment is 0% provided that an acceptable Health Insurance policy is taken out for all expatriate employees. However, Employees’ Social Security Contribution is 5%.
Maximum Allowable Foreign Employee will be 60% of total workforce @ G.O.P. fees for SR 500 per foreign employee per month.
4. Withholding Tax
Exemption of withholding tax on payment of royalties to non-resident consultants during the construction phase only.
Incentives During Operational Phase
5. Trades Tax
a) Operating Equipment:
0% trades tax on operating equipment
b) Motor vehicles:
Commercial Vehicles:
1 Vehicle per license for every 10 rooms up to 30 rooms or part thereof and 1 additional vehicle for every 20 rooms thereafter, at 25% of applicable trades tax rate. (TIA rate)
Buses for staff transport:
2 buses per license plus 1 additional bus for every 25 rooms or part thereof, all at the applicable trades tax rate. (TIA rate)
Year 5
M.A.F.E. = 40% of total workforce
G.O.P. fees at SR 500 per foreign employee per month
The company shall pay Business Tax at the following rates on taxable profits:
(2006 rate effective 1st January 2007)
Taxable Profits Business Tax Payable
First SR 250,000 0%
In excess of SR 250,000 15%
The company shall be entitled to tax credits for the following:
a) A tax credit at the rate of 5% of its Business Tax liability if 51% or more of the company is Seychellois owned.
b) A tax credit at the rate of 5% of its Business Tax liability, if the company is listed on the Seychelles Stock Exchange.
c) A tax credit at the rate of 5% as a Special Growth Area.
d) A tax credit of 5% if the number of Seychellois employees exceeds 90
% of the workforce.
We hope that the above concessions/incentives will facilitate the implementation of your project and we look forward to a mutual relationship with Ephelia.
Yours sincerely,
Lekha Nair
Principal Secretary
*(Lekha Nair in that respect signed as the Principal Secretary on the say so of the executive - State House) we did promise to leave it to you to decide on its merits. However allow us just two little words, “daylight robbery!!”