Excise Tax and Customs duty changes on alcoholic beverages
This press release serves to inform the general public of the changes to taxation of alcoholic beverages as per the commitments undertaken at the World Trade Organisation (WTO) and the recently announced changes in the 2015 budget speech.
As part of the accession process to the WTO, Seychelles was required to negotiate a market access offer, which would reflect its commitment to the membership on setting maximum tariff level that the country could apply on individual products (tariff binding). This negotiation was done at both the multilateral and bilateral level, where the latter involved the ceding of certain concessions that were imperative in order to move negotiations forward.
One of the area in which the country had to make certain concessions was with regards to alcoholic beverages, where the currently applied rates of duty were deemed too high for the country to accede with, especially noting that no other recently acceded members had managed to gain entry into the WTO with that level of duty. Consequently, Seychelles was required to reduce its applied tariffs on certain alcoholic beverages, where it opted to shift the amounts reduced by on Duty to Excise Tax.
Additionally, further to the 2015 budget announcement of a 20% increase in Excise Tax on alcoholic beverages having an alcoholic strength of 16% and above, Excise Tax on certain alcoholic beverages would thus incur a further increase.
However, whilst this may be perceived as a two-fold increase in Excise tax, in theory, there has been only a 20% general increase (considering Excise and Duty) given that Duty has been decreased by the same amount that Excise increased by initially to cater for WTO accession commitments.
Therefore it is important to reiterate that there has only been a 20 % increase in the general level of taxation on alcoholic products and that this only applies to alcoholic beverages whose alcoholic contents are 16% and above.
The table below serves to provide a practical illustration of the changes.
|Name of Product||Excise Tax Rate 2014||Excise Tax Rate 2015||Customs Duty 2014||Customs Duty 2015|
|Fortified Wines (Dried Cherry)||SCR80/1||SCR96/1||-||-|