July 06, 2020

Key fiscal measures announced in the Mauritius Budget 2020 - 2021

Levy on Companies

Companies or group of companies having gross income exceeding Rs 500M will be subject to levy on their annual gross income as follows:

Company Type	Levy (%)
Insurance, financial institutions, service providers & property holding companies	0.3
Other Companies	0.1
Companies holding a Global Business Licence and companies in the tourism sector	Not Applicable

Tax Holidays:

8-year tax holiday for companies engaged in:

Inland Aquaculture Scheme
Manufacture of nutraceutical products subject to operations started on or after 04 June 2020

Manufacture of pharmaceutical products, medical devices or high-tech products if the company has started operations on or after 08 June 2017
Worldwide institution setting up branch campuses in Mauritius will also benefit from the 8-year tax holiday

Partial Exemption Regime

For avoidance of doubt, the 80% partial exemption regime on interest income does not apply to the following:

Non-bank deposit taking institutions
Money changers
Foreign exchange dealers
Insurance companies
Leasing companies
Companies providing factoring, hire purchase facilities or credit sale facilities

Introduction of Contribution Sociale Généralisée (CSG)

The National Pension Fund (NPF) will be abolished and will be replaced by the “Contribution Sociale Généralisée” (CGS).

The (CSG) will have significant impact for both the employee and employer. As from 1 September 2020, there will be a contributory, participative and collective system which will guarantee a monthly income to retired citizens above the age of 65 as from July 2023.

A Service Employment Cheque will be introduced as from September 2020 to enable Mauritians working informally to access the contributory pension system and benefit from their years of service.

The contributions under this new scheme will be as follows:

Monthly salary (Contribution)

Employee (Contribution)

Employer (Contribution)

For individuals earning up to MUR 50,000 per month

1.5%

For individuals earning more than MUR 50,000 per month

Income Exemption Threshold

The income exemption thresholds will be increased by amounts ranging from Rs 15,000 to Rs 80,000.

Solidarity Levy

Lump sum income received by a person by way of commutation of pension, death gratuity or as compensation for death or injury is excluded from the computation of the Solidarity Levy.
There will be an increase in solidarity levy rate from 5% to 25% on leviable income in excess of MUR 3 Million instead of MUR 3.5 Million as from 1 July 2020 for Mauritian citizens.
The levy will be payable under the Pay As You Earn (PAYE) system.

Excise duty on Motor Vehicles

A rebate on the amount of customs duty payable will be granted on vehicles, provided they were in a bonded warehouse before 5thof June 2020 and are cleared from Customs before 30th of June 2021:
40% of the excise duty payable on the motor car (up to 1000 cc) or Rs 100,000, whichever is the lower.
30% of the excise duty payable on the motor car (up to 1001 to 1600 cc) or Rs 125,000, whichever is the lower.
30% of the customs/excise duty payable on the motor vehicle or Rs 125,000, whichever is the lower. This applies for Buses, Double/ Single Space Cabin Vehicles and Vans

VAT

Digital services

VAT legislation will be amended to subject non-residents to VAT for digital and electronic services provided through internet and consumed in Mauritius.

VAT reporting and payment

Reporting and payment of VAT for construction contracts with the government will now be allowed as per receipt date instead of invoice date.

VAT exemption

Medical research and development centres will now be exempted from payment of VAT on construction materials and specialised equipment
VAT exemption will be available to the newly introduced Inland Aquaculture Scheme and duty on equipment
Exemption threshold on value of articles imported by post or courier services will be reduced to MUR 1,000

Value of taxable supplies

Market value of a supply to be deemed as taxable value where a transaction is not at arm`s length

Zero-rated supplies

Goods and services previously exempted will now be reclassified as zero-rated supplies:

Unprocessed agricultural and horticultural produce
Live animals used as, or yielding or producing goods for human consumption other than live poultry
Transport of passengers by public service vehicles excluding contract buses for transport of tourists and contract cars
Medical, hospital, and dental services

Apportionment of input tax

Persons engaged in projects spanning over several years may apply for an alternative basis of apportionment covering the full project length
MRA empowered to request such person for applying an alternative basis of apportionment

VAT refund on residential properties

Claim of less than MUR 25,000 will be entertained where amount of VAT paid during a quarter and the preceding three quarters do not exceed MUR 25,000

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