By Vishal Bheeroo
In what is his third consecutive budget, Finance Minister Dr. Renganaden Padyachy made several announcements for the Financial Services sector where at the outset he commented that the jurisdiction has exited the FATF Grey List, EU Blacklist and UK list of High-Risk Countries.
The budget deficit is expected to be 4 percent of GDP which the Finance Minister told would be 1 percent lower in comparison to the last year. The Public Sector Debt is expected to fall steadily from 87.4 percent in June 2022 to reach 78 percent in June 2023 while GDP is poised to grow by 8.5 percent during 2022-23 where the budget is driven by investment to build resilience in the economy, public finance, and the people.
In this context, he emphasised the need to build on the momentum following the exiting of grey and blacklists where a slew of measures has been announced and encompassing:
Financial Services
Bank of Mauritius (BoM) and Bank of China (BoC) will launch a Regional Renminbi clearing Centre this year;
-BoM to collaborate with the National Payment Corporation of India for the issuance of Rupai, Card, and the Indian QR Code in Mauritius;
-National Payment Card will be introduced for customers where the Financial Services Commission (FSC) will revamp its existing framework to enable Re-insurance companies to set up operations in Mauritius;
-Government to adapt its legislative framework to converge the domestic and global business regime as part of actions against the Tax BEPS, introducing a domestic minimum top-up tax to ensure that residence companies of large MNCs tax at a minimum of 15 percent.
-For the 55th anniversary of the BoM, a 5-year Jubilee bond will be issued at an annual rate of 4 percent.
-To cater for specialist training, the Financial Services Institute (FSI) will become an awarding body.
-BoM and FSC will renew their one-year Graduate Training Programme on AML targeting 100 graduates offering a monthly stipend of Rs 15,000.
-A Financial Crime Commission will be set up with a view to helping ensure effective coordination in the fight against financial crime.
Under Taxation:
Global Minimum Tax
The Income Tax Act will be amended to cater for any change that may be required in connection with the introduction of a domestic minimum top-up tax, applicable to companies resident in Mauritius forming part of multinational enterprise groups having a global annual revenue of 750 million euros or more, to ensure that they are taxed at the global minimum rate of 15%.
Premium Visa Scheme
It will be clarified that the foreign employer of the holder of a Premium Visa will not, in respect of that employee, be subject to the payment of –
(i) corporate tax under the Income Tax Act; and
(ii) social contribution under the Social Contribution and
Social Benefits Act.
ICT sector:
-Digital Industry Academy to leverage training to 1,000 individuals across Data communications, 5 G, cloud computing, AI, and Cyber security from July 2022.
-Digital Industry Academy to set up a DIA Incubator for high-end ICT product development and partner with Telcos providers, banks, and international players to provide mentoring and financing to 50 incubators.
-Rs 15 million earmarked for the Government online centre to help provide continuous access to Government e-services and pursue public services digitization strategy to provide numerous online services.
-Five-year blueprint will be devised to maintain a continuous dynamism and facilitate sector expansion.
SMEs:
-SME Act amended to review its definition for SMEs with micro-enterprises from a turnover of Rs 2 million to Rs 10 million; small enterprises for above Rs 10 million to Rs 30 million; Medium enterprises above Rs 30 million up to Rs 100 million.
-All companies with a turnover up to Rs 100 million will be categorised as SMEs rather than falling under the existing label of Rs 50 million.
-Mid-market enterprises with a turnover of up to Rs 250 million will be included as a new category under SME Act. It will help enable 142,000 SMEs to avail and improve access to Government Support Programme and Financing.
Business Facilitation:
-Businesses investing, training, recruiting, and innovating will not be charged a single rupee to start a business and incorporate a company in Mauritius.
-BoM will ensure that a bank account can be opened within a week whether it’s an individual or business, where an inter-ministerial committee chaired by the Prime Minister will oversee the streamlining of licenses and permits spanning across various sectors such as tourism, health and logistics, among others.
-Introduction of a Business Facilitation Reform Bill as apex legislation on Business Facilitation.
-Support Businesses by enabling them to recruit talent under the Young Professional Occupational Permit to enable entrepreneurs and students completing their students to benefit from Premium Visa.
-Holders of Residence Permit will avail of the opportunity upon applications to acquire Residential Property subject to a minimum of USD 350,000 outside the existing scheme provided a contribution of 10 percent to the Solidarity Fund. A committee chaired by the PM will assess applications on a monthly basis.
Silver Economy Strategy:
A Silver Strategy has been designed to attract more silver retirees where the Economic Development Board (EDB) will host the first edition of the Mauritius International Silver Economy festival.
More updates to follow
