NEW PROPERTY TAX ON FOREIGN OWNED RESORTS AND RESIDENCES ‘NOT A WELCOME MOVE‘
(Posted 30th September 2017)
The recently announced special tax measure targetting foreign owned residential and commercial properties, including all foreign owned hotels and resorts, drew swift condemnation from a section of hoteliers and some owners of houses, which were united in condemning the measure as discriminatory, counterproductive and not welcome.
All of them writing or speaking on condition of anonymity expressed their dismay over the 0.25 percent tax which will become due in the next 2018/19 financial year.
‘Resorts and hotels in the Seychelles are already subject to substantial taxes, often very much higher than in other destinations. Our purchases of consumables too are costing a lot more due to import taxes and the added cost of bringing goods to the islands. The larger resorts are providing a lot of employment for Seychellois and have in recent years progressively moved young citizens through the ranks to reach managerial levels. In fact, there is a labour shortage of skilled labour as all newcomers to the industry in the islands come to realise.
People who bought themselves retirement homes or properties they come to visit a couple of times each year and of course the owners of hotels owned from abroad, are now going to have to pay another quarter percent tax in the value of the properties, which in case of some large resorts will be a massive figure. It will have to find its way into the pricing of the rooms and services, making us even more expensive at a time when competition on this level is no longer able to just put higher prices into the market.
They say there will be consultations in coming days and weeks but it seems a decided fact that the tax will come. It is a populist move, seen by several of my colleagues as anti foreign and discriminatory and no one is happy about it. At the same time, they may start with a quarter percent of a value which will surely also be imposed on us without recourse but who can stop them to raise it after that to half or even a full percent?‘ ranted one particular hotel manager well known to this correspondent.
Given the strong sentiments expressed does the question now arise if those affected may consider withholding goodwill on other fronts from their cooperation with government and how it will affect foreign investment requiring land on the islands, given the new tax measures.
As often will only time tell where this is heading but for sure it has ruffled a lot of feathers among those who in good faith invested in the Seychelles over the past 10 and more years, having believed the assurances by the government of the day at the time.