VICTORIA, Seychelles, Seychelles has been ranked as the country with the second highest tax burden among African nations, according to the 2023 Africa Tax Administration Forum (ATAF) report released last month. The report, which compares tax-to-GDP ratios across the continent, placed Seychelles just behind a leading jurisdiction in a ranking that has prompted debate among local economists about the sustainability of the current tax mix. The findings were circulated among finance ministries across the continent last week.
The ATAF report, titled African Tax Administration Outlook, covers 30 African countries and analyses revenue performance, tax policy choices, and administration capacity. Seychelles recorded a tax-to-GDP ratio of 32.4 percent, placing it second on the continent. The figure has been driven largely by taxes on goods and services, business taxes, and a series of environmental and tourism-related levies introduced over the past decade. Several earlier reports have noted the country reliance on a narrow set of revenue streams compared to larger continental states.
According to the report, the country at the top of the continental ranking was placed at 33.5 percent, while several North African jurisdictions followed closely behind on the list. Other island states in the Indian Ocean recorded ratios in the mid-twenties, well below the Seychelles figure. The data was drawn from submissions by national revenue authorities and validated by the ATAF secretariat in Pretoria, and covers both direct and indirect taxes for the 2022 financial year.
Local economists have pointed out that the high ranking partly reflects Seychelles narrow tax base, which forces government to rely more heavily on a smaller number of revenue streams. With a population of just over 100,000 and a tourism-dependent economy, the country has fewer opportunities to broaden taxation compared to larger continental states. Some have also noted that the ratio is influenced by the country status as an international financial centre, which attracts certain categories of business taxes.
The Ministry of Finance has acknowledged the report and indicated that it is reviewing the findings. Officials have noted that the government continues to balance the need for revenue with the need to remain competitive, particularly for foreign investors and the tourism sector. Further policy decisions in this area are expected to be outlined in the next budget address, and the ministry has invited submissions from the private sector and the wider public before then.
