Ministry of Finance, Trade and Economic Planning meets with Insurers Association of Seychelles to kick-start discussions on possibility of harmonizing various tax exemptions on premiums
July 14, 2017
Friday 14th July 2017, VICTORIA, SEYCHELLES: In an effort to provide more support to the Small and Medium Enterprise, SMEs, as well as initiate discussions on pertinent issues and challenges the Insurers Association of Seychelles are facing, the Ministry of Finance, Trade and Economic Planning, MFTEP, is working closely with relevant partners, stakeholders and entities to ensure that necessary actions are taken.
In his national budget address for this year, the Minister for Finance, Trade and Economic Planning, Dr. Peter Larose stated that in 2017, “the MFTEP in collaboration with other Ministries and Government Agencies intend to harmonize the various tax exemptions offered to various parties as incentives. These taxes include VAT, Trades Tax, Excise Tax, Business Tax and Income Tax”.
Along this line, the MFTEP met with representatives from the Insurers Association of Seychelles and the Seychelles Revenue Commission, SRC, to start discussions on the possibility of reviewing policies and tax exemptions and or reduction for SMEs.
The Minister for Finance, Trade and Economic Planning, Dr. Peter Larose said that this meeting comes at an opportune time, as we are in the process of looking at all taxes for the 2018 budget exercise, and that it is important to meet and discuss with partners and to see how best to help improve the ease of doing business for SMEs.
Among the issues discussed were how best to assist SMEs especially in reducing the cost and increasing the ease of doing business relook at applicable taxes on insurance policies for SMEs, review of taxes on insurance policies, health insurance policies and benefits.
Mr. Lambert Woodcock, Chairman of the Insurers Association of Seychelles stated that there is a need to encourage more people to take on insurance policies but at the same time, to review and reconsider the 15% VAT. According to Mr. Woodcock, the idea is to make insurance policies more affordable for all especially SMEs; the Association felt that the VAT on the insurance policies is high and it is one of the highest in the region”.
And on his part, Mr. John Esther, a member of the Association, said that whatever the basic cost of insurance is, it is further inflated by the various taxes that apply such as VAT, TMT, Corporate Social Responsibility and POPF. Moreover; “insurance policies are rarely seen as a benefit protecting the insured against misfortunes, but as a tax or something taken because it is required by a bank of by law. This is why it is important to make it easy, by looking at all available options to make it more affordable, whilst we educate on the importance of being insured."
Minister Larose reiterated that “we have made a national commitment in the budget presentation and we must see how best to deliver on what we have said, we should focus on long term benefits and start an education campaign to sensitise the general population on the importance of having an insurance policy as part of their responsibility”.
Mrs. Marie-France Fanchette, Acting Deputy Commissioner from SRC pointed out that it is worth noting that any considerations for the reduction in taxes should be one that benefits everyone and should be across the board. And that a proper analysis is called for so that we agree on a tradeoff, whereby Mr. Woodcock explained that a reduction in premiums may eventually result in more people taking out more policies.
There were also discussions on working closely with insurance companies and the Insurers Association of Seychelles to provide a more innovative and affordable insurance products. Discussions on these issues are expected to continue, and according to Minister Larose, this is a starting point.
Editor’s Note
The Insurers Association of Seychelles (IAS) was set up in 2015 and consists of members from all the local licensed insurers, namely SACOS, Harry Savy Insurance, MUA and Falcon Insurance.
The objects of the Association are:
a) To provide a platform for insurers transacting business in Seychelles to exchange views, ideas and concerns on matters affecting the insurance industry
b) To secure the advancement and promote the development of the insurance industry on a sound basis
c) To promote a better understanding of insurance among all stakeholders
d) To afford opportunities for consultation and cooperation in all matters affecting the common interests of Members
e) To represent the insurance industry in all dealings with the Government or any other Organization on legislative and other matters of concern to the industry
f) To promote and maintain a high standard of ethics among its Members
g) To promote the prompt settlement of disputes between Insurers