Mauritius - Tripro · 2020. 6. 5. · The Honourable Dr. Renganaden Padayachy, Minister of Finance,...

TRI-PRO ADMINISTRATORS LTD

2020-2021

The Honourable Dr. Renganaden Padayachy, Minister of Finance, Economic Planning and Development of theRepublic of Mauritius presented his first budget for the fiscal year 2020/2021 on the 4th of June 2020.

The 2020/2021 budget, themed “Our New Normal: the Economy of Life”, emphasizes on the need for our nation torise up to this ‘New Normal’ lifestyle caused by the Pandemic of the COVID-19 whilst overcoming the challenges tobe faced with the economic crisis. The 2020 – 2021 Budget focuses on the following tryptic:

Rolling out the ‘Plan de Relance de l’investissement et de l’économie’.

Engaging in Major Structural Reforms

Securing Sustainable and Inclusive Development

The Honourable Minister also highlighted that the Budget has been presented to cater for a time of unprecedentedcrisis specifying that it is one of the worst in modern history with just a few months ago nearly half of thepopulation worldwide confined in their homes, airplanes grounded, schools closed, with the Work from Homeconcept becoming the norm, putting our daily life on hold.

In his opening speech, the Honourable Minister stated that a deep contraction, globally and locally, is unfoldinghowever the depth and the duration of this contraction remains unconfirmed. The IMF is forecasting that theworld GDP, in its best-case scenario, would contract by around 3 percent in 2020. He further states that thefallout on our economy is without comparison. The latest forecasts point to a GDP contraction of up to 11 percentthis year, the worst GDP contraction ever for our country.

Financial Services

Export Strategy

Technology and AI

Doing Business

Environment

Fiscal Measures

Blue Economy

Amendment to

Legislations

Budget Brief 2020-2021

The financial services sector is facing a number of challenges requiring fundamental reforms. Theutmost priority of the government is to continue ensuring compliance of our jurisdiction withrecommended international best practices and norms.

The Government is committed to completing the five remaining recommendations under the Financial Action Task Force (FATF) Action Plan for Mauritius by September 2020.

To comply with these 5 recommendations, the following measures will be implemented:

Risk-based supervisions in accordance with the recommendations of the FATF;

Targeted outreach programmes to promote clear understanding of money-laundering andterrorist financing risks;

Increased reporting of suspicious transactions;

Targeted financial sanctions in cases of terrorist financing; and

Timely access to beneficial ownership information.


A new AML/CFT (Miscellaneous Provisions) Bill will be introduced to complement existinglegislative framework

A dedicated and specialised Financial Offences Court will also be set up.


To further enhance competitiveness of the Financial Services Sector, the following new products willbe introduced in line with the recommendations of the 10-Year Blueprint:

The Central Bank digital currency.

An Insurance Wrapper.

Variable Capital Companies. .

An inaugural Sukuk issuance by the Bank of Mauritius.

Green and Blue Bond frameworks by the Bank of Mauritius.

The Bank of Mauritius will also come up with new frameworks for digital banking, private bankingand wealth management by banks.

A dedicated Venture Capital Market will be set up at the Stock Exchange of Mauritius for start-upsand SMEs.


Port dues and terminal handling charges forexports will be waived from July to December2020 and reduced by 50% for the periodJanuary to June 2021.

Extension of the Freight Rebate Scheme forexports to Africa; and the Trade Promotion andMarketing Scheme for exports to Japan,Australia, Canada and the Middle East.

The Export Credit Insurance Scheme will beextended to cover all our exports.

Government will support the first two years ofoperation of a “Made in Mauritius” warehouseset-up in Tanzania and Mozambique.

To foster the transformation of the textileindustry, a reputable international firm willconduct a comprehensive review of our exportmodel.

Companies will benefit from a 50 percentrefund on the costs of certification, testing andaccreditation of local laboratories.

They will also be exempted from the paymentof registration duty and land transfer tax forthe purchase of immovable property.


A new Data Technology Park at Côte d’Or, based on knowledge and skills, will lay the foundationfor a data driven economy and would create the right eco-system to accelerate the innovationprocess from idea to creation.

The Park will encompass 12 highly skilled and specialised centres from additive manufacturingto deep artificial intelligence.

The Park will endow Mauritius with a Carbon Neutral Green Certified Tier 4 Data Centre.

The Deep Artificial Intelligence Centre will provide the necessary support for start-ups, existingbusinesses and government services to achieve a major digital transformation.

A National E-Learning Platform will be developed to encourage the 500 first establishments inthe world to create campuses in Mauritius, the following incentives are being provided:

❖ An 8-year tax holiday

❖ VAT exemption on information technologies and e-learning enabling technologies


With a view to ensure that Mauritius is on top of the list for doing business in Africa and make iteasier to create a company, operate a business, hire talents, export to the world, and resolvecommercial disputes, the following e-services would be set up to continue to facilitate businessrelated public service delivery:

An Integrated Single Window for Trade will be developed to connect all stakeholders within the portcommunity. .

A Maritime Single Window will be introduced by the Mauritius Ports Authority to facilitate vessel clearancesand reduce administrative bottlenecks at the port.

The Corporate and Business Registration Department (CBRD) will become the central repository for allbusiness information and licences through a digital platform.

All deeds for registration of property shall be submitted through the Mauritius e-Registry System.

A new Land Use and Valuation Information Management System (LAVIMS) based on Blockchain technology.

A new online system will be developed for services delivered by the National Land Transport Authority.

The implementation of the Centralised-KYC project by the Bank of Mauritius will be expedited.

The Bank of Mauritius will also upgrade the Mauritius Credit Information Bureau (MCIB) to provide creditscore of potential borrowers.

The e-Procurement System will become mandatory for all public sector bodies.


Submission of deeds for registration of property will be made mandatory throughthe Mauritius e-Registry System (MERS) for notaries, banks, insurance companies,leasing companies and new and imported second-hand dealers in motor vehicles

Online access for search and registration will be increased

Certificate of Registration from EDB for warehouses will be eliminated. The buyer willneed to submit an undertaking to the Registrar General

The cadastre of the City Council of Port-Louis will be updated

Purchases of immovable property by foreign buyers will be facilitated through adigital power of attorney

A one-stop-shop facility will be set up at the Registrar-General Department for theregistration of motor vehicles.


Application fee for a Building and Land Use Permit (BLUP) will be waived

BLUP fees for construction of pharmaceutical manufacturing factories, foodprocessing plants and warehouses will be waived

Online application for a Building and Land Use Permit (BLUP) through NELS will bemade mandatory for all constructions

The Environment and Land Use Appeal Tribunal Act will be amended to specifyclearly who can appeal against the decision of the Ministry of Environment, SolidWaste Management and Climate Change to issue, or not, an EIA License

The Utility Regulatory Authority will start licensing operators in the power sector

A High-Level Committee chaired by the Honourable Prime Minister will be set up toexpedite processing and approval of major projects


Directors will be liable for prejudicial conducts which will be defined in theCompanies Act

All public companies will need to have at least 2 independent and non-executivedirectors on their Board of Directors

Any creditor will be able to request the liquidator/ receiver manager to furnish anyfinancial information in relation to a company

The fees for re-instating companies will be reduced from 15,000 to Rs. 5,000, and therequirements for giving notice will be done online

Registration of Ultimate Beneficial Owners as well as VAT registration will be made attime of business registration

The Bank of Mauritius will provide credit score of potential borrowers

Public sector agencies will publish their Service Level Agreements

Special efforts will be made to ensure timely enforcement of contracts andsettlement of commercial disputes

The Road Traffic Act will be amended to enable Holders of a ‘B Carrier’ Licence tolease their vehicles including the carriage of goods


Stevedoring and shore charges levied by the Cargo Handling Corporation Ltdand Quay fees for laden import containers will be increased by 10% for theperiod between January and June 2021

The Mauritius Revenue Authority will regulate fees charged by freightforwarders for Groupage cargo

Any customs declaration (Bill of Entry) made in respect of imports will bedeemed to be a self-assessment for enhanced compliance


The validity of an OP will be increased to 10 years, renewable The minimum investment requirement for an OP as Investor will be reduced to USD

50,000 The minimum turnover and investment requirement for Innovator Occupation

Permit will be removed The salary criteria of MUR 30,000 will be extended to other specified sectors Holders of an OP as Professional will be able to invest in other ventures without any

shareholding restriction EDB will be solely responsible for processing of OP applications .

OP holders will be allowed to bring their parents as their dependents No restriction for spouses of OP holders to work in Mauritius


Permanent Residence Permit will be extended from 10 years to 20 years. The existing turnoverand salary criteria are being removed

Existing OP holders, who have held the permit for three consecutive years will be eligible toapply for the 20-Year PRP

The minimum investment amount for an investor to directly obtain a Permanent ResidencePermit will be reduced from USD 500,000 to USD 375,000

Non-citizens holding a Residence Permit, an Occupation Permit or a Permanent ResidencePermit will be able to acquire one plot of serviced land not exceeding 2,100m² forresidential purposes in Smart Cities. This measure will be valid for a period of 2 yearsending 30th June 2022.

The work permit and resident permit will be combined into one single permit.


The levy of 5 percent on the excess amount of chargeable income plus dividends of a residentMauritian citizen will now be 25 percent and applicable as from Rs 3 million annually.

Lump sum income received by a person by way of commutation of pension, death gratuity oras compensation for death or injury is excluded from the computation of the Solidarity Levy.

The solidarity levy will be payable on a Pay As You Earn (PAYE) basis.

Introduction of a levy on companies having gross income exceeding Rs 500 million in anaccounting year or if it forms part of a group of companies where the gross income of thegroup exceeds Rs 500 million.

The levy will be on the annual gross income at the rate of –

❖ 0.3% for insurance companies, financial institutions, service providers and propertyholding companies; and

❖ (b) 0.1% for other companies.

The levy will not apply to a company which operates in the tourism sector or which holds aGlobal Business Licence.


The income exemption threshold for all categories of taxpayers will be raised. The only ones forthe 2020-2021 income year are:

❖ MUR 15,000 for a taxpayer having up to 2 dependents

❖ MUR 50,000 for a taxpayer having 3 dependents

❖ MUR 80,000 for a taxpayer with at least 4 dependents

Government is thus reducing or removing income tax for some 55,000 middle incomehouseholds.

These new thresholds will be effective as from income year starting on 1st July 2020, i.e. onincome received by an individual as from 1st July 2020.


The income exemption thresholds will be increased by amounts ranging from Rs 15,000 to Rs 80,000 asshown in table below:


A. Individual with no dependent

310,000 325,000 15,000

B. Individual with one dependent

420,000 435,000 15,000

C. Individual with two dependents

500,000 515,000 15,000

D. Individual with three dependents

550,000 600,000 50,000

E. Individual with four or more dependents

600,000 680,000 80,000

Retired/ Disabled person with no dependents

360,000 375,000 15,000

Retired/ Disabled person with dependents

470,000 485,000 15,000

An 8-year income tax holiday will be grantedto a company engaged in the manufacture ofnutraceutical products provided it starts itsoperations on or after 4th June 2020..

The 8-year income tax holiday granted to acompany engaged in the manufacturing ofpharmaceutical products, medical devices orhigh-tech products will apply to a companywhich has started or starts its operation on orafter 8th June 2017.

An 8-year tax holiday and duty and VATexemption on equipment will be granted to theinland aquaculture scheme.

A company carrying on life insurance businesswill pay tax based on the existing system oftaxation or under an alternative minimum tax,whichever is the higher.

The alternative minimum tax will be computedat the rate of 10% of profit attributable toshareholders adjusted for capital gains orlosses.

For avoidance of doubt, it will be clarified thatthe partial exemption regime on interestincome does not cover –

(i) non-bank deposit taking institutions;

(ii) money changers;

(iii) foreign exchange dealers;

(iv) insurance companies;

(v) leasing companies; and

(vi) companies providing factoring, hirepurchase facilities or credit sale facilities


The NPF will be abolished in favour of a more sustainable Pension System., notably theCONTRIBUTION SOCIALE GÉNÉRALISÉE (CSG).

Benefits would continue to be paid to each and every one who has previously contributed to theNPF Fund.

The first payment of benefits under the CSG will be in July 2023.

Under this new system which will be effective as from 1st September 2020, employees earning upto Rs 50,000 monthly, will contribute 1.5% and their employers 3% on monthly salary.

For employees earning more than Rs 50,000 monthly, the contribution will be 3% and that ofemployers 6% of monthly salary.

This new system will also include self-employed individuals.



Individual accounts Contributive, participative and collective pool

Contribution: 3% by employee 6% by employer

Contribution: For individuals earning up to MUR 50,000 per month: - 1.5% by employee / 3% by employer For

individuals earning more than MUR 50,000 per month:

- 3% by employee / 6% by employer

Contribution up to a ceiling of MUR 18,740 monthly

Removal of ceiling. Contribution on total basic salary

Voluntary contribution by self-employed individuals

Compulsory contribution by self-employed individuals of MUR 150 per month

A taxpayer will be allowed to claim as dependent a bedridden next of kin who is in his care. He/shewill thus benefit from an additional annual deduction in the range of Rs 80,000 to Rs 110,000provided that the total number of dependents does not exceed 4.

A special allowance is paid by Government through the Mauritius Revenue Authority (MRA) tosupplement the National Minimum Wage. During the calendar year 2020, every full-time Mauritianemployee will receive a monthly guaranteed income of Rs 10,200.

Capital expenditure incurred on electronic, high precision machinery or equipment and automatedequipment will be allowed as a deduction in the year in which it is incurred instead of beingamortised over more than two years.

Green technology equipment, which is depreciated over two years, will now include equipment andmachinery used for eliminating, reducing or transforming industrial wastes.

Enterprises which have been affected by the COVID-19 will be entitled to have a double taxdeduction on their investment in Plant and Machinery during the period 1st March 2020 to 30thJune 2020.


To develop the fishing industry, the MIC will invest in joint ventures engaged infishing activities and its value chain.

An inland aquaculture scheme will be introduced with the following incentives:

(a) an 8-year tax holiday; and

(b) duty and VAT exemption on equipment.

The Daily rate of the bad weather allowance to fishermen will be increased from Rs365 to Rs 425.

A single licence for chartered yacht calls in Mauritius will be introducedencompassing multiple berthing options, rights for helicopter flights and gaming.


The Private Pensions Scheme Act will be amended to –:

I. allow for a member of a private pension scheme to transfer the amount of accrued benefits to another private pension scheme; and

II. establish a procedure for unclaimed funds under a private pension scheme to be transferred to a special fund to be set up by FSC.

I. The Securities Act will be amended to create an obligation on corporate finance advisory tokeep and maintain records of debts raised on behalf of issuers.

The Insurance Act will be amended to provide for the management committee of theInsurance Industry Compensation Fund to properly discharge its functions and effect payments,other than compensation to victims, in line with the objectives of the Hit and Run Sub-Fund.


The Financial Services Act will be amended to:

I. provide for the definition of ‘peer to peer’ lending;II. provide that in the absence of an appointed Chief Executive, the Board may appoint such

employee to exercise the powers set out under Part VIII, relating to powers of the FSC;III. empower the FSC to collect information on a conglomerate group, including unregulated

entities, which would impact on the safety and soundness of the financial group;IV. provide for prior notice to be given when a licensee wishes to surrender its licence and to

provide a timeframe to licensees for a proper transfer of business operations to the transferee;V. give a flexibility regarding the filing of annual financial statements during a curfew period or

situation of emergency or natural disasters;VI. cater for exemptions for filing of annual financial statements where the FSC is of the opinion

that it is not applicable;VII. provide that the Enforcement Committee shall consist of not more than 4 employees

designated by the Board; and;VIII. provide for the duties of auditors of all licensees of the FSC to include the reporting of

irregularities to the FSC.


The Banking Act will be amended to:I. provide for clarity in the definition of “significant interest” and “related party”;II. encourage digital banking;III. provide for the ground for refusing an application for a foreign exchange dealer or money

changer licence be set out in the law;IV. transfer the responsibility for supervision of money lenders from the Bank of Mauritius (BOM)

to the Financial Services Commission (FSC);V. allow the BOM to vary the capital adequacy ratio to a lower level should the need arise or in

exceptional circumstance;VI. allow flexibility for commercial banks to submit financial statements to the BOM;VII. allow the BOM the discretion to extend the time period for rotation of audit firm for an

additional period of 2 years;VIII. vest the conservator with the powers to execute any instruments in the name of the financial

institution and to initiate, defend and conduct in its name any action or proceedings to whichthe financial institutions may be a party;

IX. align section 96A of the Banking Act, relating to protection of customers of financial institutions,with the requirements of the Ombudsperson for Financial Services Act; and

X. empower the BOM to issue directives in addition to guidelines and instructions


The Workers’ Rights Act will be amended to:

I. harmonise the definition of earning with that specified in the Remuneration Regulations;II. facilitate the implementation of the Protocol on Heavy Rainfall for the Private Sector as

regards the remuneration to be paid to workers where work has been stopped as a result of climatic conditions;

III. reinforce the protection against discrimination; IV. avoid double payment in respect of the Portable Retirement Gratuity Fund where

severance allowance is paid; V. better protect the rights of workers against abusive termination by extending the

provision of the Protection Order to the ruling of the Redundancy Board; VI. provide for employees earning up to Rs 100,000 monthly to be entitled to end of year

bonus under the Worker’ Rights Act. Employees earning more than Rs 100,000 monthly will be covered under the End of Year Gratuity Act;

VII. reinforce the provisions against violence at work in line with International Labour Office Convention, which Government intends to ratify; and

VIII. provide a better income security to laid off workers by increasing the amount of Transition Unemployment Benefit payable in view of the impact of the COVID-19 pandemic on employment.


We are a boutique management company, duly licensed in Mauritius by the Financial Services Commission to provideCorporate and Fiduciary services to global businesses and high net worth individuals.

We are a team of professionals possessing degrees and professional experience in diverse areas like finance, accounting,law, chartered secretarial practice and management.

With more than 25 years’ experience in the industry, servicing European, Asian and African clientele, and meeting thequality standards that multinational enterprises and other high net worth individuals demand, our team of professionalsare fully committed and engaged to provide bespoke advisory services and structures for enhanced efficiency andsafeguard of financial resources.

Our range of services include:

• Company, trust & fund set up and administration;• Trust and Foundation establishment;• Global Headquarters;• Real Estate Acquisition & Residency;• Family Office;• Captive Insurance;• Outsourcing solutions – accounting, payroll, back office.

Tri-Pro Administrators LtdLevel 5, Maeva Tower, Bank Street,

Ebene Cybercity, MauritiusTel: (230) 464 0889

Fax: (230) 467 8858Email: [email protected]

Website: www.tripro.mu

The above information has been sourced from the Budget speech delivered by the the Minister of Finance, Economic Planning and Development to theNational Assembly on 4th June 2020. The content of this summary has been solely sent to you to provide you with an oversight of the measures that havebeen contemplated and does not in whatsoever circumstances purport to be any investment, tax or legal advice.

Professional advice should be sought before acting on the tenor of these highlights.

Mauritius - Tripro · 2020. 6. 5. · The Honourable Dr. Renganaden Padayachy, Minister of Finance,...

Documents

Transcript of Mauritius - Tripro · 2020. 6. 5. · The Honourable Dr. Renganaden Padayachy, Minister of Finance,...