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:
Insurance, financial institutions, service providers & property holding companies
Companies holding a Global Business Licence and companies in the tourism sector
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)
For individuals earning up to MUR 50,000 per month
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.
- 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 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.
- 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
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