Economy of Seychelles

Exports and Imports

Seychelles' economy relies significantly on imports due to its limited domestic production capacity. Key exports include fish and fish products, coconut products, and clothing. Imports consist mainly of foodstuffs, machinery, and petroleum products. In recent years, Seychelles has been working to diversify its export base to reduce dependency on imports and enhance economic sustainability.

Infrastructure

Seychelles has invested in developing its infrastructure, particularly in roads, ports, and telecommunications. Major roads connect various parts of the main islands, facilitating transportation and tourism. The country has also improved port facilities to accommodate both passenger and cargo ships, supporting trade and economic activities.

Balance of Trade

Seychelles generally experiences a trade deficit, as imports outweigh exports. This deficit is partly offset by revenues from tourism and other services. The balance of trade is a critical economic indicator, influencing Seychelles' economic policies and strategies for sustainable development.

Fiscal Policy

Seychelles' fiscal policy aims to maintain fiscal discipline while supporting economic growth and social welfare. The government manages revenue primarily through taxes on income, goods and services, and international trade. Tax rates are structured to promote investment and economic activity while funding essential public services and infrastructure projects.

Monetary Policy

The Central Bank of Seychelles oversees monetary policy to ensure price stability and support economic growth. The CBS uses tools such as interest rates and foreign exchange interventions to manage inflation and maintain the stability of the Seychellois rupee. Monetary policy actions are crucial in sustaining investor confidence and promoting financial stability.

Trade Agreements

Seychelles benefits from trade agreements within the African Union and the Eastern and Southern Africa region. These agreements provide preferential access to regional markets and support Seychelles' export-oriented sectors, such as fisheries and tourism. The country also engages in bilateral agreements to strengthen economic ties and expand market opportunities.

Environmental Regulations

Seychelles places significant emphasis on environmental conservation and sustainability. Regulations focus on protecting the country's biodiversity, marine resources, and natural habitats. Measures include marine protected areas, waste management initiatives, and sustainable tourism practices. The government collaborates with international organizations and stakeholders to enforce environmental regulations and promote responsible stewardship of Seychelles' natural resources.

Tax System in Seychelles

Capital gains tax: Seychelles does not currently impose a specific capital gains tax on profits from investments. Income from investments is generally considered as part of the individual's or company's regular income and taxed accordingly.
Corporate tax rate: The corporate tax rate in Seychelles is 33%. This tax applies to the profits earned by businesses operating within the country, including both resident and non-resident entities. The government has introduced measures to encourage foreign investment, such as tax holidays and other incentives in targeted sectors.
Sales tax: Seychelles applies a Value Added Tax system, with a standard rate of 15%. Certain goods and services may qualify for reduced rates or exemptions, depending on government policies and regulations.
Property tax: Seychelles levies a property tax on real estate, based on the annual rental value of the property. Rates vary depending on the type and location of the property, with local authorities responsible for assessment and collection.
Payroll tax: Employers and employees in Seychelles contribute to social security funds through payroll taxes. These funds finance various social security benefits, including pensions, healthcare, and unemployment benefits. Rates vary depending on income thresholds and contribution requirements.
Tax deductions and credits: Seychelles provides various tax deductions and incentives to promote economic activities and investment. These include deductions for research and development expenses, incentives for businesses in priority sectors like tourism and fisheries, and credits for employing local workers or investing in renewable energy projects.
Tax compliance: Tax compliance in Seychelles is managed by the Seychelles Revenue Commission (SRC), which is responsible for administering and enforcing tax laws. The SRC has implemented measures to improve efficiency and transparency in tax collection, including electronic filing systems and taxpayer education programs.
Tax burden: The overall tax burden in Seychelles is moderate compared to many countries. Taxes on income, profits, consumption, and property contribute to government revenue while supporting public services and infrastructure development.