Finance Minister Renganaden Padayachy announced the Budget 2023-24 today, starting off with mentioning that the IMF and Statistics Mauritius are aligned – Mauritius has exceeded by far its GDP growth forecasts for 2022. Also adding that according to the IMF’s World Economic Outlook in April 2023, Mauritius was amongst the 20 fastest growing economies in the world last year.
He underlined that under the leadership of the Prime Minister, Honourable Pravind Kumar Jugnauth, the Government has acted boldly by protecting households faced with rising cost of living, uprating benefits, investing in Mauritian entrepreneurship, promoting sustainable growth that creates jobs for the youth, and consolidating the safety net of the most vulnerable.
Keeping in mind building with strength, empathy and with a purpose, the Minister said, “We are giving back to the population what they have given to our country. It is a choice of society. It is our choice. To Dare and to Care. For the people.”
The Budget 2023-24 focussed on 3 key pillars: –
(a) Strengthening the Foundations of our Economy;
(b) Continuing the Transformation of Mauritius into a
Sustainable Economy; and
(c) Building the Future we Deserve.
Photo credit: MBC
Under the improving the ease of doing business, Minister Padayachy noted that to realise this potential, we need to constantly improve our doing business environment. He highlighted:
- First, a company will be provided with a unique identification number, be it for company, business registration, VAT, tax or employee number.
- Second, setting up of a B-Ready Coordination Committee to coordinate and ensure implementation of reforms in line with the recommendations of the World Bank.
- Third, the 38 existing licences for registration of different activities in the tourism sector will be streamlined.
- Fourth, to encourage the adoption of e-signatures, ICTA will now recognise Certifications including DocuSign and Adobe Sign.
- Fifth, the Tax Arrears Settlement Scheme (TASS) is being extended for a period of one year, with a full waiver of penalties.
- Sixth, we will continue to support our local entrepreneurs as they grow.
Furthermore, to promote gender equality at all levels, listed companies shall have a minimum of 25 percent of women on their boards. In order to encourage women entrepreneurship, women owned MSMEs will benefit from a 10 percent increase in the margin of preference for public procurement of goods. He said, “Government will contribute Rs 15,000 monthly for a period of two years for newly employed women or those who have been unemployed for at least a year under the Prime à L’Emploi Scheme. These companies will be provided with a 200 percent tax deduction.”
Next, the Minister said that without the opening of our economy to foreign talents, we will not be able to sustain high levels of growth and develop new economic sectors.
Minister Padayachy mentioned, “We are engaging on a major reform of our migration policy. We will simplify the recruitment process for businesses.” First, the occupation permit will be streamlined: –
(a) The threshold for occupation permit for professionals will be reduced to Rs 30,000;
(b) An applicant for an occupation permit will be allowed a business visa of 120 days without having to leave Mauritius;
(c) Obtaining an occupation permit will no longer be conditional on having a local bank account;
(d) The Young Professional Occupation Permit will be opened to all fields of study;
(e) A silent is consent provision of 4 weeks will be introduced for registration of foreign professionals with professional bodies including the medical, dental and veterinary councils; and
(f) The composition and process of the Medical, Dental, Veterinary and Allied Professionals Councils will be reviewed.
Second, they are streamlining the process for obtaining a workpermit: –
(a) Work permit applications will be made solely on the National e-licensing platform;
(b) Introducing a silent is consent principle of 4 weeks for work permits applications;
(c) A new tier system will be introduced allowing companies with a good track record to avail from a streamlined process to recruit foreign labour under a work permit;
(d) The ratio of foreign to local employees is being removed for specific sectors; and
(e) Non-citizens on a tourist or business visa will be allowed to apply for a work permit
Following this, when it comes to transforming Mauritius into a manufacturing and services hub for the region, Minister Padayachy stated that it will necessitate a well-defined industrial and services development strategy.
To this end, The Minister said that they will update the existing legal framework on industrial development to cater for the setting up of Special Economic Zones to effectively position Mauritius as a gateway for the African Market. He said, “Investments linked to production of materials for renewable energy technologies will henceforth benefit from incentives under the Premium Investor Certificate. Finally, we will help accelerate the decarbonisation of the manufacturing sector and its transition towards a Carbon Neutral Industry.”
He also added, “Government will provide a 50 percent waiver on the increase in electricity prices for the next two years for companies moving towards 100 percent renewable energy. In addition, a 75 percent subsidy will be provided for the conduct of energy audits.”
Coming to the financial services sector is the second largest contributor to our GDP, the Finance Minister mentioned that the Government needs to consolidate the sector as an engine of growth and employment.
He said, “We must continue to remain at par with the highest levels of international standards and best practices. We will therefore: –
(a) Undertake a National Risk Assessment of money laundering and terrorism financing risks with the assistance of the World Bank;
(b) Introduce a new set of legislative amendments to reinforce the existing AML/CFT legal framework and a Whistleblowing Act to sustain the fight against corruption; and
(c) Commission an independent assessment of the effectiveness of our AML/CFT system ahead of the ESAAMLG mutual evaluation in 2025.
Furthermore, to consolidate the position of the Mauritius International Financial Centre, Government will: –
(a) Extend the scope of the Variable Capital Companies to allow their use for family offices and wealth management;
(b) Introduce a new framework to support the licensing and operation of Electronic Money Institutions (EMI);
(c) Introduce a Wealth Manager and Family Officer licence under Private Banking; and
(d) Increase the promotion and marketing budget of the Economic Development Board by Rs 100 million.
Moreover, in line with their sustainability agenda and to promote the greening of our economy, the Minister said:
(a) The exemption of interest income derived from bonds to finance renewable energy projects is being extended to all sustainable projects; and
(b) The Bank of Mauritius will develop a Carbon Trading framework for both blue and green credits.
Photo credit: MBC
To further protect depositors, the Bank of Mauritius will operationalize the Mauritius Deposit Insurance Scheme and the Mauritius Deposit Insurance Company. The Digital Rupee will be rolled out in November this year on a pilot basis. To reinforce the position of Mauritius internationally, the Bank of Mauritius will set up its Centre for International Cooperation (CIC) to host international ad-hoc and permanent representations and projects.
Minister Padayachy also mentioned that the office of the World Bank in Mauritius will be the first representation under this initiative.
He said, “The Knowledge Hub of the World Bank will equally be launched under this initiative. Moreover, the Bank of Mauritius will host the OECD – FinCoNet Annual General Meeting in November this year.”
When it come to the budget outturn, Minister Padayachy announced that the measures unveiled today will bring an additional 2 percentage points to GDP growth, and 40,000 extra jobs.
He said,”For 2023 – 2024, GDP will grow robustly by 8 percent, similar to 2022-2023. Total expenditure will amount to Rs 200 billion whilst total revenue will be of Rs 179 billion. This makes a budget deficit of 2.9 percent of GDP. 1 percent lower than the 3.9 percent last year, and 2.7 percent below the 5.6 percent deficit registered in 2021-2022. Public sector debt is expected to go down from 86.1 percent in June 2022 to 79 percent by June 2023 and 71.5 percent by end of June 2024.”
He added, “The target in the mid-term is to be at pre-pandemic levels that is 60 percent. This Budget is one in which we dare and we care. We have dared to engage in a daring reform. We have transformed our economy by making it easier for businesses to invest, hire and grow. We have built the economic blocks which will drive our growth and resilience. To Dare and to Care. This is our guiding principle.”
He concluded saying, “We have dared to create more opportunities by ensuring that individuals from all backgrounds have equal access to upward mobility. this Budget is about the future we deserve. It is about daring and caring for each and everyone. It is about investing in the future of our children.”
More updates to follow…
