INTERCONTINENTAL TRUST NEWSLETTER · • 5 ‘Technopoles’ at Highlands, Rose- Belle, Flacq,...
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Mauritius Budget 2015-16 volume 7 . issue 18 INTERCONTINENTAL TRUST NEWSLETTER e first budget of the newly elected government was presented by the Honourable Minister of Finance and Economic Development, Mr. Seetanah Luchmeenaraidoo on 23 rd March 2015. e main objectives of the Budget 2015 - 2016 are to: • Redirect the economy towards a path of high investment and high employment • Secure long-term sustainable development for all • Eradicate inequality and social injustice • Promote transparency and good governance in the management of public affairs e proposals put forward in this budget are in line with the government’s electoral pledge and are expected to promote a more conducive and business-friendly environment as well as tackle social inequality and injustice. It is also expected to contribute towards job creation and help the economy achieve a growth rate of more than 5%. e salient features of the Mauritius Budget 2015 - 2016 are depicted as follows: Instilling a Sound, Stable and Inclusive Financial Services Sector One of the objectives of the new government is to consolidate and diversify both our market base and products through the implementation of the following measures and policies: • A special Financial Sector Incentive Scheme to attract international Asset and Fund Managers to relocate their front-office operations in Mauritius • Reactivation of the Financial Services Promotion Agency for more effective promotion campaigns, especially to diversify our Global Business activities in Africa • Set up of Financial Services Institute at Réduit to provide specialised training courses focused on the actual needs of the industry • Bank of Mauritius will provide market makers with an exit mechanism to revitalise the secondary market for Government Securities • Amendment of the Income Tax Act to exempt non-resident corporate bond holders from withholding tax • Amendment of the Insurance Act to enable the issue of insurance policy documents in digital format • Full cooperation with Indian authorities to bring to a fruitful conclusion the discussions on outstanding issues relating to the Double Taxation Avoidance Agreement Impeccable Service Intelligent Solutions
Transcript of INTERCONTINENTAL TRUST NEWSLETTER · • 5 ‘Technopoles’ at Highlands, Rose- Belle, Flacq,...
Mauritius Budget 2015-16
volume 7 . issue 18
INTERCONTINENTAL TRUST NEWSLETTER
The first budget of the newly elected government was presented by the Honourable Minister of Finance and Economic Development, Mr. Seetanah Luchmeenaraidoo on 23rd March 2015.
The main objectives of the Budget 2015 - 2016 are to:
• Redirecttheeconomytowardsapathofhighinvestmentandhighemployment• Securelong-termsustainabledevelopmentforall• Eradicateinequalityandsocialinjustice• Promotetransparencyandgoodgovernanceinthemanagementofpublicaffairs
The proposals put forward in this budget are in line with the government’s electoral pledge and are expected to promote amoreconduciveandbusiness-friendlyenvironmentaswellastacklesocialinequalityandinjustice.Itisalsoexpectedto contribute towards job creation and help the economy achieve a growth rate of more than 5%.
The salient features of the Mauritius Budget 2015 - 2016 are depicted as follows:
Instilling a Sound, Stable and Inclusive Financial Services Sector
One of the objectives of the new government is to consolidate and diversify both our market base and products through the implementation of the following measures and policies:
• AspecialFinancialSectorIncentiveSchemetoattractinternationalAssetandFundManagerstorelocatetheir front-office operations in Mauritius• ReactivationoftheFinancialServicesPromotionAgencyformoreeffectivepromotioncampaigns,especially todiversifyourGlobalBusinessactivitiesinAfrica• SetupofFinancialServicesInstituteatRéduittoprovidespecialisedtrainingcoursesfocusedontheactual needs of the industry• BankofMauritiuswillprovidemarketmakerswithanexitmechanismtorevitalisethesecondarymarketfor Government Securities• AmendmentoftheIncomeTaxActtoexemptnon-residentcorporatebondholdersfromwithholdingtax• AmendmentoftheInsuranceActtoenabletheissueofinsurancepolicydocumentsindigitalformat• FullcooperationwithIndianauthoritiestobringtoafruitfulconclusionthediscussionsonoutstandingissues relatingtotheDoubleTaxationAvoidanceAgreement
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AfewoftheothermeasuresthataffecttheFinancialServicesSectorinclude:
• Reductionofthemaximuminterestratefrom19%to12%,andthepenaltyratefrom5%to2%forhire purchase transactions• SettingupanOfficeofOmbudspersononFinancialInstitutionswhichwilldealwithcomplaintsreceivedand recommend appropriate remedial action• TheSpecialLevyonBanks,currently10%ofchargeableincomeforsegmentAbankingbusinessand3.4% on book profit and 1% on operating income for segment B banking business, will be maintained to June 2018
Opening the Mauritius economy – reinforcing partnership with Africa and expanding trade
WithaviewofenhancingoureconomicpartnershipwithAfricaandexpandingregionaltrade,thefollowingmeasureshave been proposed:
• RedefinitionoftheroleoftheMauritiusAfricaFundwhichwillconcentrateonthedevelopmentofSpecial EconomicZones(SEZ)invariousAfricancountriesincollaborationwithMadagascar,GhanaandSenegal who have already expressed their intention to work with Mauritius on same • Settingupofaregionalshippinglinetoexpandregionaltradeandtheroleofourportintheregion.• 8TradeandInvestmentManagerstobepostedbytheBoardofInvestmentinstrategiccitiesaroundtheworld (Beijing,Geneva,Pretoria,London,Moscow,Mumbai,NewYorkandParis).Theywillbebasedinourembassies.
Developing the ICT sector as a Key Driver of Development
Aspartoftheobjectivetoachievelongtermsustainabledevelopment,severalmeasuresaffectingtheICTsectorhavebeen put forward as follows:
• Athirdinternationalgatewaythroughtheinstallationofanewsubmarinefibreopticcableconnecting MauritiusandRodriguestotherestoftheworld• Thewholeislandwillhavefullbroadbandfibreconnectivitywithinthenext3years• TheICTSkillsDevelopmentProgrammewillbeextendedtocovertrainingforunemployedyouthsevenifthey do not have a job placement• IntroductionofaschemewherebyICTcompaniesthatrecruitaminimumof100employeeswillbeallowed tobringinaquotaofforeignqualifiedemployees.BigglobalICTplayerswillthusbeencouragedtosetup business in Mauritius• ThenumberoffreeWIFIhotspotsacrosstheislandtobeincreasedfrom15to350• Abolitionofthe10centslevyonSMSandMMS• Rs125milliontofundaNationalInnovationProgrammewiththeobjectivestofosteraResearchand Development culture that will stimulate the creation of new and innovative products and services
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Investment in Mega Projects and creation of Employment
In a bid to createmore jobs and improve our lifestyle, 13mega-projects including eight projects under the ‘SmartCity’conceptwillbeintroduced.Theseprojectswillbeecofriendly,usestate-of-thearttechnology,bringinmoderntransportation and reduce traffic congestion. The projects of which six are ready for implementation, include the following:
• TheOmnicaneairportcityinthesouth-east• StFélixVillageprojectsinthesouth• TheMédineIntegratedParkinthewest• RochesNoiresinthenorth-east• TheAzuriPhase2projectinthenorth• TheTerraprojectinthenorth• TheHighlandsCityinthecentre• TheRicheterreProjectinthevicinityofPortLouisand• 5‘Technopoles’atHighlands,Rose-Belle,Flacq,RivièreduRempartandBambous
Theaboveprojectsinvolvetheoptimizationofsome7,000arpentsofland,Rs120billionrupeesofprivateandforeigndirect investments, the creation of thousands of jobs and be a catalyst in the construction industry
Inaddition,thePort-Louisharbourwillbetransformedfromadestinationporttoaregionalhubforbunkering,seafood,transshipment,cruiseandpetroleum.Afull-fledgemarinawillalsobedevelopedthere.
Business Facilitation and Investment Climate
Business Facilitation:
In order to achieve a growth rate ofmore than 5%, the governmentwill have to encourage investment by gaininginvestors’ confidence and improving the ease of doing business. The main measures that have been put forward are:
• GrantingofgreaterpowerstotheFastTrackCommitteetosimplifyprocedurespertainingtothe implementation of major investment projects• Objectivetoabolishatotalof70permitsandlicensesthathave“becomeobsolete”• Automaticrenewalofsometypesoflicensesuponpaymentoffees(includinge-payment)• Businessoperatorswillbegrantedtheopportunitytorenewtheirlicensesforaperiodofupto3years• Tourismoperatorswillhavetheopportunitytoapplyforanomnibuslicenseincorporatingtheirvariousactivities• Astudyisbeingcarriedoutbythegovernmentinconnectionwiththelabourmarketandthewagepolicywith aviewtoharnessaconducivebusinessenvironmenttoboostFDI• BusinessRegistrationActwillbeamendedtofacilitatesharingofinformation• CompaniesActwillbeamendedtoallowforelectronicfilingofdocumentsandelectronicpaymentoffeesand correction of clerical errors in documents files to avoid multiple filings
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Restructuring the IRS/RES
Thegovernmentisproposinganin-depthanalysisoftheIRS/RESschemessothatsocietyiscushionedfromthenegativeimpact of these scheme. The aim is to set up a single scheme that would be centered on inclusive development for both localsandforeigners.Also,theInvestmentPromotionActwillbereviewedtoincorporatenewregulationsalongwiththeintroductionofNewPlanningPolicyGuidelinesthatwillbeannouncedshortly.
Main Fiscal Measures
Personal Income Tax
IncreaseintheincomeexemptionthresholdsbyRs10,000forincomeyear1st July 2015 to 30th June 2016 as follows:
IncomeExemptionThresholds:
AdditionalDeductionforTertiaryEducation
The deduction can now be claimed for the first 6 years of study instead of 3 years.
InterestRelief
Afirst-timehome-ownerwillbeabletoclaimreliefforthefullamountofinterestpaidonhismortgageloanandforthefull duration of that loan.
DonationofBasicRetirementPension(BRP)
AnypersonwhoelectstodonatehisBasicRetirementPension(BRP)infulltoanapprovedcharitableinstitutionoranapproved Foundation will be exempt from income tax thereon.
2014-2015(Rs) 2015-2016(Rs)
285,000395,000455,000495,000335,000445,000
IndividualwithnodependentIndividualwithonedependentIndividualwithtwodependentsIndividualwiththreeormoredependentsRetired/disabledpersonwithnodependentRetired/disabledpersonwithdependents
275,000385,000445,000485,000325,000435,000
2014-2015(Rs) 2015-2016(Rs)
135,000135,000
IfabroadIfinMauritius
125,000 80,000
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Period Submission Date
1Januaryto31December20141 January to 30 June 20151 July 2015 to 30 June 2016
31March2015/15April201530September2015/15October201530September2016/15October2016
Change in fiscal year end
The fiscal year end has been changed from 31st December to 30th June.
SubmissionofPersonalIncomeTaxReturns
CorporateIncomeTaxReturns
Corporateswillcontinuetosubmittheirtaxreturns6monthsfollowingtheendoftheiraccountingperiod.
Companieshavingyearendas30th Junewillbeallowed,attheiroption,topaythetaxdueinthelastquarterbasedonanadditionalAPSreturn.Anyadjustmentbasedontheirauditedfinancialstatementswillbeeffectedbefore31st January.
Taxes and Levies under Income Tax Act
AlternativeMinimumTax(“AMT”)
AMThasbeenabolishedforallsectors.
Small and Medium Enterprises (turnover of not more than Rs 10 million)
VATRegistration
ThecompulsoryVATregistrationthresholdisbeingraisedfromaturnoveramountofRs4milliontoRs6million.
AdvancePaymentSystem(APS)Returns
TheturnoverthresholdforsubmissionofAPSisbeingraisedfromRs4milliontoRs10million.
CompanyAnnualFees
TheannualfeepayabletotheRegistrarofCompaniesbyasmallprivatecompanywillbereducedfromRs2,500toRs500.
AnnualReturntoRegistrarofCompanies
ThereisnorequirementforasmallcompanytofileannualreturnstotheRegistrarofCompaniesexceptwherethereisa change in shareholding, board of directors or other particulars.
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Simplified Financial Statements
TheCompaniesActwillbeamendedtoallowfilingoffinancialstatementspreparedonacashbasisbysmallprivatecompanies.Nobalancesheetwillberequiredtobesubmitted.
SimplifiedIncomeTaxSystem
ASimplifiedTaxSystemwillbeintroducedtofacilitatesmallenterprisestocomplywiththeir legalrequirementsasregardstokeepingofrecords,filingofincometaxandVATreturns.SmallenterpriseswillbegiventheoptiontojointheSimplifiedIncomeTaxsystem.
VATCashAccountingScheme
AsimplifiedVATsystemforsmallenterpriseswillbeintroduced.
Miscellaneous Tax Measures
InterestIncome
Interestreceivedbyanon-residentcompanyfromdebenturesquotedonthestockexchangewillbeexemptedfromincome tax.
Tax Administration: General
InterestRateforlatepaymentoftaxes
Interest rate for latepaymentof taxes to theMauritiusRevenueAuthority (MRA)which is 1%permonthover 12months (i.e. 12%) will be reduced to 0.5% per month (i.e., 6% in a year).
PenaltyClausesforSMEs
Penaltyclausesforasmallbusinesswillbeadjustedtotheirspecificincomeprofileandtheircapacitytopay:
• Incaseoflatesubmission/nonsubmissionofIncomeTaxreturn,themaximumamountofpenaltywillbe reducedfromRs20,000toRs5,000• ForlatepaymentoftaxestoMRA,therateofpenaltywillbereducedfrom5%oftheamountdueto2%
Tax Administration: Income Tax
TaxDeductionatSource(TDS)
TherequirementtooperateTaxDeductionatSource(TDS)willnotapplytoacompanywhoseannualturnoverdoesnotexceedRs6million.
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Mauritius Office
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LargeCompanyStatement
AllcompanieswithanannualturnoverexceedingRs100millionwillberequiredtosubmiteveryyeartotheMRAanelectronicStatementgivingthedetailsonpaymentsmadeduringtheyearinexcessofRs100,000forpurchaseofgoodsand services as well as on their recipients.
Tax Administration: VAT
OtherAmendmentstoVAT
• ThetimelimitforrepaymentofVATbytheMRAwillbeginonlyonsubmissionoftherelevantreceiptsforthe claim for repayment• TheVATrecovery,throughinstrumentssuchasanattachmentorderandinscribedprivilege,willbelimitedto VATamountunpaidinsteadofthewholeamountpayable
Tax Administration: Customs
Inter-alia, theCustomsActwillbeamendedto introducea5%penaltyonlatepaymentofcustomsdutyandexciseduty, as is the case in other revenue laws, to streamline and automate the warehousing process of goods with a view to facilitatingtrade,reducingcostandoptimisingtheuseofriskmanagementinlinewiththeRevisedKyotoConventionbest practices.
Tax Administration: Registrar-General’s Department
E-Registration
AmendmentswillbebroughttorelevantenactmentsinordertoenableattheleveloftheRegistrar-General’sDepartment:
• onlinesubmissionofdocuments• e-registration• e-payment
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