Agriculture and Fisheries (Incentives) Act, 2005 (No. 3 of 2005)

AGRICULTURE AND FISHERIES (INCENTIVES) ACT, 2005 (Act 3 of 2005) J. A. Michel President 31st March, 2005 AN ACT to provide for the grant of certain incentives to persons engaged in agriculture, fisheries and activities related thereto. ENACTED by the President and the National Assembly. Part 1 - Preliminary 1. This Act may be cited as the Agriculture and Fisheries Short title and (Incentives) Act, 2005 and shall come into operation on such date commencement as the Minister responsible for Finance may, by Notice in the Gazette, appoint. Interpretation 2. In this Act "agricultural exporter group A" means an agricultural exporter whose foreign exchange earnings exceed 40 percent ofhis turnover;· "agricultural exporter group B" means an agricultural exporter whose foreign exchange earnings are between 20 and 40 per cent ofhis turnover; "boat owner" means a person owning one or more fishing boats; "capital equipment" means (a) in relation to agriculture, any item of equipment used solely in the production or processing of agricultural goods and having a value ofR! 000 or more and includes construction materials; (b) in relation to fisheries, boats, engines including outboard engines ofa capacity not exceeding 50 horse power and any other item approved by the Ministry responsible for Fisheries and used solely in commercial fishing activities, processing and exporting of fish products and other marine products each of which item of equipment has a value ofRl000 or more, and includes refrigeration trucks and furk lifts used by processors and exporters and construction and boat building materials; "c.i.f." means the cost of bringing goods to Seychelles including the cost of the goods, · insurance and overseas freight; "commercial motor vehicle" means any motor vehicle designed for the transportation of goods and includes pick-up trucks and dual or twin C!lbs; "Competent Authority" means the Principal Secretary of the Minister responsible for Finance; "Concessionary GST" means the GST calculated as a percentage of the aggregate of the c.i.f. value, the concessionarytrades tax and 0% markup of the good,s; "construction materials" includes all materials used during the construction or major renovation phase of the business premises in respect of which a concession is claimed; "consumables and raw materials" means such goods as shall be approved as such for the purpose of this Act by the Minister and specified in a notice published in the Gazette; "exporter" means a person engaged in the export of agricultural products or fish, fish products and other marine products as the case may be; "farmer" means an individual engaged in the production oflivestock, fiuits, vegetables, flowers or other crops at a specified location; "farming entity" means a company, partnership or cooperative engaged in the production oflivestock, fiuits, vegetables, flowers or.other crops; "fisherman" means an individual engaged in commercial fishing; "fisheries exporter group A" means a fisheries exporter who has 75 per cent or more of his gross turnover or the equivalent ofRl ,000,000 or more m foreign currency remitted to Seychelles; "fisheries exporter group B" means a fisheries exporter who has less than 75 percent ofhis gross turnover or the equivalent ofless than RJ ,000,000 in foreign currencyremitted to Seychelles; "G.O.P" means the gainful occupation permit issued under the Immigration Decree; "G.S.T" means the Goods and Services Tax imposed under the Goods and Services Tax Act; "inputs" means goods used in the production or processing °.f agricultural goods; "Minister" means the Minister responsible for Finance; "minor operating equipment" means items .of equipment used solely in the production or processing ofagricultural goods or in the fishing industry as the case may be and having a value ofless than RI 000 per item but does not include consumables and raw materials; "officer" -means an officer of the Ministry responsible for Finance or an officer of the Trades Tax Imports Division; "processor" means (a} in relation to agricultural activities, a person other than a person engaged in. a cottage industry or the production of alcoholic beverages who or which adds value by transforming locally produced farm·output into semi-finished or finished products; (b) in relation to fisheries, a person engaged in the transformation of fish and other marine products by a process of adding value; ''protective and safety equipment" includes protective clothing, gloves and other items approved by the Ministry responsible for Agriculture and Fisheries. Part 2 - Grant oflncentives 3, Notwithstanding anything to the contrary in the Business Tax Act, Trades Tax Act, the Goods and Services Tax Act, the Immigration Decree, the Social Security Act, the Exchange Control Act or regulations made thereunder (a) farmers; (b) farming entities; (c) agricultural processors; (d) agricultural exporters; (e) fishermen; (f) boat owners; (g) fisheries processors; and (h) fisheries exporters, (hereinafter referred to as "relevant persons") shall be granted incentives in accordance with the provisions of this Act. Grant of incentives 4. (1) A relevant person specified in section 3(a) to ( d) shall- Entitlement (a) be entitled to business tax concessions specified in Part.! of Schedule I; (b) pay Social Security contributions under the Social Security Act in accordance with Part 2 of Schedule I; ( c) obtain Gainful Occupation Permits under the Immigration Decree in accordance with Part 3 of ScheduleJ; ( d) be entitled to trades tax and G.S.T concessions in accordance with Part 4 of Schedule l; ( e) be permitted to retain a percentage of foreign exchange earnings in accordance with Part 5 ofSchedule I. (2) A relevant person specified in section 3(e) to (h) shall (a) be entitled to business tax concessions specified in Part 1 of Schedule 2; (b) pay social security contributions under the Social Security Act in accordance with Part 2 of Schedule 2; ( c) obtain Gainful Occupation Permits under the Immigration Decree in accordance with Part 3 of Schedule 2; (d) be entitled to the trades tax and GST concessions in accordance with Part 4 of Schedule2; ( e) be entitled to the fuel concession in accordance with Part 5 of Schedule 2; (f) be permitted to retain a percentage of foreign exchange earnings in accordance with Part 6 of Schedule 2. (3) Every relevant person shall be registered for the pwpose of this Act by the Ministry responsible for Agriculture and Fisheries and such registration shall be in addition to any other registration, licence or authorisation required by any other law for a person to-engage in the activity for which incentives are granted under this Act. (4) Where a person is registered under subsection (3) the person shall be issued with a certificate of registration. 5. (1) Any person claiming any concession under. this Act shall apply in the prescribed form to the Competent Authority for the grant of such concession. (2) The Competent Authority may require the applicant to furnish any additional information: relevant to the application for the pwpose of dealing with the application. 6. Goods imported into Seychelles in respect of which any concession has been granted under this Act shall not be sold, exchanged, rented, given away or exported from Seychelles or applied to any purp?se other than that for which it was imported except- · (a) in the case of a transfer of the relevant person's business for which it was so imported as a going concern to another person; (b) after the lapse of 2 years from the date of importation, upon the relevant person paying or giving security to the satisfaction of the Comptroller of Trades Tax Imports or the Application to · be made to Competent Authority Restrictions as to use or disposal of certain goods Offences and penalties Commissioner of Taxes as the case may be for the payment of an amount equivalent to the amount of Trades Tax or G.S.T as the case may be which would have been payable on it but for this Act, and with the prior written approval of the Competent Authority which may be given subject to such conditions as m,1y be specified. 7. (1) Tbe Competent Authority mayrequireany relevant person to keep such records and in such manner as may be directed by the Competent Authority and to take such other measures as may be necessary to ensure that this section is complied with and the relevant person shall comply with that requirement. (2) A person who contravenes the provisions of subsection ( 1) is guilty of an offence and liable on conviction to a fine not exceeding RS0,000. (3) An officer may (a) enter and search any premises used by a relevant person for the purpose of conducting the business of the relevant person; (b) examine goods in respect of which any concession has been granted; ( c) require arelevant person or any person who has the control or custody of or access to any record kept pursuant to subsection ( 1) to produce such record for inspection; ( d) examine and take extracts from, and make copies of, any record kept pursuant to subsection (1). (4) Anypersonwho. (a) obstructs an officer in the exercise of the officer's functions under this Act; or (b) fails or refuses to produce or give access to any record kept pursuant to subsection ( 1) when required to do so by an officer under subsection (3)(c), is guilty ofan offence and on conviction liable to a fine ofan amount nor exceeding RS0,000. (5) Where a person who has contravened subsection (1) or (4) admits to the contravention and agrees in writing to the contravention being dealt with under this subsection, the Competent Authority may compound the offence by accepting a sum of money not exceeding the maximum fine specified for the offence under subsection (2) or ( 4) as the case may be. (6) The holder of a certificate ofregistration in respect of which any vehicle or goods have been imported with the benefit of a concession under this Act who contravenes any provision of section 6 is guilty of an offence and liable on.conviction to a fine of an amount not exceeding RS0,000. (7) Where a person who has contravened any provision of section 6 admits to the contravention and agrees in writing to the contravention being dealt with under this subsection, the Competent Authority may compound the offence by accepting a sum of money not exceeding the maximum fine specified for the offence in subsection ( 6). (8) A sum of money received under subsection (5) or (7) shall be dealt with as if it were a fine imposed by a court. (9) In any proceedings brought against a person for an offence under subsection (2), (4) or (6), it shall be a good defence if the person proves that: Revocation or suspension of certificate of registration (a) the offence has been compounded under this section; and (b) the person has paid the sum of money referred to in subsection ( 5) or (7). 8. ( 1) The Principal Secretary of the Ministry responsible for Agriculture and Fisheries may, where he is satisfied that a certificate of registration has been granted on the basis of information or material which to the knowledge of the holder of the certificate was false or misleading or that the holder of the certificate has breached any condition of the certificate or has otherwise become disqualified for the grant of the certificate or has contravened any provisions of this Act (a) revoke or suspend the certificate in whole or in part for a period of not less than 6 months; and (b) forthwith notify the Competent Authority and the holder of the certificate of the revocation or suspension as the case may be. (2) Where a certificate. of .registration is revoked or suspended under subsection (1) the holderof the certificate shall cease to be entitled to the concessions and incentives in relation to that certificate. (3) Subject to subsection (1), where the holder of a certificate is aggrieved by a revocation or suspension of the certificate he may within 15 days ofreceiving the notification of revocation or suspension appeal against the decision to the Supreme Court. ( 4) The Supreme Court may on such appeal affirm or quash the dedsion of the Principal Secretary. (5) Where on an appeal under subsection (4) the Supreme Court, or on an appeal the Court of Appeal, quashes the decision of the Principal Secretary, the certificate of registration shall be deemed not to have been revoked or suspended. 9. The Ministerresponsible forFinancemaymakeregulations Regulations for carrying into effect the provisions of this Act or for the amendment of any Schedule. SCHEDULE 1 INCENTIVES FORAGRICULTURE PARTl (1) Business Tax Relevant person Business Tax ·-----~ Fanner 0% Fanning entity R0-240,000 0% Above R240,000 15% flat Agrk;ultural Processor R0-240,000 0% Above R240,000 15% flat Agricultural Exporter Group A R0-240,000 0% Above R240,000 10% flat Agricultural Exporter Group B R0-240,000 0% Above R240,000 15% flat (2) Special deduction on taxable income Marketing and promotion Allowable deduction from taxable income shall be 200% of actual or qualifying expenditure. The amount qualifying for the deduction shall be 5% of turnover or the actual expenditure incurred in respect of marketing and promotion expenses whichever is !owe~. ,,, (3) Accelerated depreciation Rates of depreciation allowable on capital investments other than land and buildings will be at the following rates: Relevant person Parmer Farining entity Year I 2 3 4 5 i PART2 Social Security Employer's Social Stcurity Contribution ·0% Rl 00 per registered permanent employee per month (inclusive of enmlovee's contribution) % 45 40 20 15 5 Employee's Social Security Contribution O%l Agricultural Processor Maximum 20% 5% Exporter Group A 0% 5% Exporter Group B Maximt1tn 20% 5% PART3 (I) Gainful Occupation Permit (G.O.P) Relevant person Fees and applicability Fanner l. Maximum Allowable Foreign Employees (M.A.F.E) =25% of the total number of employees 2. G.O.P fee shall be RS00 per person per month. farming entity I. Maximum Allowable Foreign Employees (M.A.F .E) = 25% of the total number of employees 2. G.O.P fee shall be R500 per person per month. Agricultural Processor L Maxim!lm Allowable Foreign Employees (M.A.F.E)= 25% of the total number of employees 2. G.O.P fee shall be R500 per person per month, . Agricultural Exporter l. Maximum Allowable Foreign Employees (M.A.F.E)=25% of the total number of employees Group A 2. G.O.P fee shall be R500 per person per month. Agricultural Exporter l. Maximum Allowable Foreign Employees (M.A.F.E)=25% of the total number of employees Group B 2. G.O.P fee shall be R500 per person per month. (2) Where a relevant person applies to the Competent Authority for approval to employ a number ofemployees in excess of the maximum allowable nwnber of foreign employees stating the special circumstances urged in-support of the application, the Competent Authority may grant the application on the concessionary terms specified in this Part subject to such conditions as may be imposed by the Competent Authority. PAR.T4 Trades Tax and G.S. T Concessions Relevant Capita.I Colll-mercial Motor Inputs and Minor Protective and persons Equipment Vehicles Operating SaCefy Equipment Eq-uipment Farmer u¾ Trades Tax 50o/o o:f applicable 5% Trades Tax 0% Trades Tax + trades tax rate + + 0%G.S.T + Concessionary 0%G.S.T Concessionary G.S.T G.S.T . Farming entity 0% T.-a:des Tax SO¾ of" applicable 5% Trades Tax 0% Trades Tax + trades tax rate + + Oo/oG.S.T + Concessionary ·oo/oG.S.T Concessionary G.S.T G.S.T Agricultural ,0% Trades Tax SO¾ of' applicable 5% Trades Tax 0% Trades Tax Processor + trades ~ ra,te + + 0% a.s:r + Cotlcessiona:ry 0%O.S.T Concessionary G.S.T G.S.T Agricultural 0% Trades Tax 50% .of' applic able Q0/4 Trades Tax 0% Trades Tax Exporter G.i;-oup + trades tax rate + + A Oo/o G.S.T + Concessiona::ry 0%G.S.T Concession~ G.S.T G.S.T Agricultural ,... Oo/o 'Trades Tax 50% of' applicable 5% Trades Tax Oo/o Trades Tax ~orter Oro.up + trades tax. rate ·+ + B O¾G.S.T + Concessjonary 0%O.S.T Concessionary G.S.T G.S.T PARTS Foreign Exchange Retention Relevant person Percentage of retention Agricultural Exporter Group A 50% Agricultural Exporter Group B 15% (I) Business Tax SCHEDULE 2 INCENTIVES FOR FISHERIES PART 1 Relevant person Business Tax Fisherman ()% Boat owner R0-240,000 0% Above R240,000 15% flat . Fisheries Processor RQ-240,000 0% Above R240,000 15% flat Fishertes Exporter Group A R0-240,000 0% Above R240,000 I 0% flat Fisheries Exporter Group B R0-240,000 0% Above R240,000 15% flat 2. Special deduction on taxable income Marketing and promotion Allowable deduction from taxable income shall be 200% of actual or qualifying expendture. The amount qualifying for the deductio.n shall be 5% oftumover or the actual expenditure incurred in respect of marketing and promotion expenses whichever is lower. (3) Accelerated depreciation Rates of depreciation allowable ori capital investnumts, other than land and building will be at the following rates; .--------·--·-·---~ Ym\r I 2 3 4 s Relevant person Fisherman Boat owner Fisheries Processor Fisheries Exporter' Group A Fisheries Exporter Gtoup B PART2 Social Security Em.ployer,s Socia) Security Contribution 0% % 45 40 20 15 s RI 00 per registered permanent employee per month (inclusive of emj,loyee's contribution) Maximum 20% 0% Maximum 20% .•. Employee's Social Security Contdbution 0% 5% 5% 5% PART3 (1) Gainful Occupation Permit (G.O.P) . Relevant person Fees and applicability Fisherman Not Applicable Boat owner with an initial Not Applicable investment ofRJ00,000 or less Boat owner with an initial 1. Maximum A11owable Foreign Employees (M.A.F~E) = 25% of the total investment of more than number of employees R300,000 2. G.0.P fee shall be RSOO per person per month. Fisheries Processor 1. Maximum Allowable Foreign Employees (M.A.F.E)= 25% of the total number of employees 2. G.O.P fee shall be RSOO per person per month. Fisheries Exporter Gruy.p A 1. Maximum Allowable Foreign .Employees (M.A.F.E) =25% of the total ntimber of employees 2. G.O.P fee shall be RSOO per person per nmnth. Fisheries Exporter Group B 1. Maximum Allowable Foreign Employees (M.A.F.E) = 25o/o of the total number of employees 2. G.O.P fees shall be R5( )0 per person per month. (2) Where a relevant person applies to the Competent Authority for approval to employ a numberofemployees in excess of the maximwn allowable nwnber of foreign employees stating the special circumstances urged in support of the application, the Competent Authority may grant the application on the concessionary terms specified in this Part subject to such conditions as may be imposed by the Competent Authority. PA RT4 Trades Tax G.S. T Concessions Relevant Capital Consumables Ba.it COJnmercial Minor Protective and person Equipment and Raw Motor Operating Safety Materials Vehicles Equipment Equipment Boat . 0% Trades 0% Trades 0% Trades 50% of 5% Trades Tax 0% Trades Tax o\.Wler Tax Tax Tax applicable + + + + + trades tax rate Concessionary 0%G.S.T 0%G.S.T Concessionary 0%G.S.T + G.S.T G.S.T Concessionary G.S.T I Fisheries Oo/o Trades O¾ Trades Not 50%of 5% Trades Tax 0% Trades Tax Processor Tax Tax Applicable applicable + + + + trades tax rate Concessionary 0%G.S.T O¾G.S.T Concessionary + G.S.T G.S.T Concessionary G.S.T Fisheries 0% Trades 0% Trades 0% Trades 50% of 0% Trades Tax 0% Trades Tax Exporter Tax Tax Tax applicable + + GtoupA + + + trades tax rate Concessionary 0%G.S.T 0%G.S.T 0%G.S.T 0%G.S.T + G.S.T Concessionary G.S.T Fisheries 0% Trades 0% Trades 0% Trades 50%of 5% Trades Tax 0% Trad es Tax Exporter Tax Tax Tax applicable + + GroupB + + + trades tax rate Concessionary 0%O.S.T O¾G:S.T Concessionary O%G.S.T + G.S.T G.S.T Concessionary G.S.T Relevant uerson Boat owner (excluding Long I. Liners) 2. Boat owner (Long Liners) I. 2. Fisheries Exporter Group A I. 2. ' Fisheries Exporter Group B I. 2. PARTS Fuel Concessions Fuel Concessions . Boat using 0-4,000 litres of fuel (benzene and diesel) S.F.A concessions plus thj; .0.30 cents rebat.e. per annum entitled to Boat using above 4,000 litres of fue.l (benzene and diesel) per annum entitled to S.F.A concessions plus the 0.60 cents rebate. Boat using 0-4,000 litres of diesel per annum entitled to 0% trades tax plus ' the 0.30 cents rebate. Boat using above 4,000 litres of diesel per annum entitled to 0% trades tax plus the 0.60 cents rebate. . Consumption of 0-4,000 litres of diesel per annum entitled to 0% trades tax plus the 0.30 cents rebate. Consumption above 4,000 litres of diesel per annum entitled to 0% trades tax plus the 0.60 cents rebate Consumption of 0-4,000 litres of diesel per annum entitled to 0% trades tax plus the 0.30 cents rebate. Consumption above 4,000 litres of diesel per annum entitled to 0% trades tax plus the 0.30 cents rebate PART 6 Foreign .Exchange Retention Relevant person ··•-"-·•-·· . ·--·~ .... , .. --•· Percentage of retention Fisheries Exporter Group A 50% Fisheries Exporter Group B 15% I certify that this is a correct copy of the Bill which was passed by the National Assembly on 15th March, 2005. Sheila Banks Clerk to the National Assembly