Mauritian budget 2022-2023: Salients points

14/06/2022

On Tuesday 7^th of June 2022, the Mauritian Finance Minister delivered its budget speech for the year 2022/2023. The 2022/2023 budget theme was: “WITH THE PEOPLE, FOR THE PEOPLE” as inspired from Joseph E. Stiglitz quote: “The only true and sustainable prosperity is shared prosperity.”
Building on the outcome of the 2021/2022 budget, the 2022/2023 budget is about:

Strengthening the economic growth and resilience to future shocks
Accelerating the transition to a sustainable and inclusive development model
Investing in the people

KEY ECONOMIC INDICATORS

GDP will exceed its pre-pandemic level, reaching MUR520 billion by 2022 compared to MUR465 billion in 2021
Unemployment is expected to go down to 7.8 % from 9.1 % a year ago
Exports of goods and services will reach MUR169 billion from MUR141 billion in 2021
Investment rate will increase to 21.2 % from 19.2 %
FDI will exceed MUR20 billion from MUR 15.4 billion
Tourist arrivals will reach 1 million in 2022 compared to 179,780 in 2021
Public sector debt will be on a downward trend from 96.1 % in June 2021 to 87.4 % in June 2022
Government debt will fall from 87.1 % in June 2021 to 77.3 % in June 2022
Inflation rate is expected to be at 8.6% in 2022

With the theme: “WITH THE PEOPLE, FOR THE PEOPLE”, this year’s budget had a main focus on formulating socio-economic policies in view of strengthening economic growth and resilience to future shocks. A “Maurice Stratégie” will be set up to increase jobs, higher skills, higher production, greater investment, lower inflation and lower debt.

FINANCIAL SERVICES – What should be retained.

The financial services industry has demonstrated strong resilience in the face of the crisis with a growth rate of 4.2 % last year. Moving out of the FATF, EU and UK lists, the Mauritian government intends to build on this momentum and announced:

The Bank of Mauritius together with the Bank of China will launch a regional Renminbi Clearing Centre this year
The Bank of Mauritius will collaborate with the National Payments Corporation of India for the issuance of “RuPay” cards and Indian QR Code in Mauritius
A National payment card will be introduced
The FSC will revamp its framework to enable Re-Insurance companies to set up operations in Mauritius
To adapt its legislative framework to converge the domestic and the global regime
Introduction of a domestic minimum top-up tax to ensure that resident companies of large multinationals are taxed at a minimum rate of 15%
To cater for specialist trainings in the sector, the Financial Services Institute will become an awarding body
The BOM and the FSC will renew their one-year graduate training programme on AML, targeting 100 graduates
The Financial Crime Commission will be set-up to ensure an effective coordination in the fight against financial crimes.

AMENDMENTS TO ACTS:

THE FINANCIAL SERVICES ACT

Will be amended to remove “Global Headquarters Administration”, “Global Shared Services” and “Global Treasury Activities” from the scope of “financial services”.
Will be amended to create a separate section for regulation of global activities in line with FATF requirements.

BANK OF MAURITIUS ACT

Will be amended to clarify that BOM may open accounts and accepts deposits from persons for the purpose of issuing digital currency
Will be amended to increase the functionalities of the Central KYC system and the Central Accounts Registry, with a view to facilitating collection, verification, validation and extraction of KYC records.

BANKING ACT

Will be amended to modify the criteria for the BOM to grant an in-principle approval in the context of an application for a banking license. This will be issued to the applicant only if all the conditions imposed are fulfilled and all the required documents are submitted.

INSURANCE ACT

Will be amended to establish a framework for Structured Investment-Linked Insurance Business activities

SECURITIES ACT

Will be amended to also allow an Official Exchange to investigate for market abuse cases involving issuers on securities exchanges

VIRTUAL ASSET AND INITIAL TOKEN OFFERING SERVICES ACT

Will be amended to allow the FSC and investigatory authorities to make use of software/digital tools in carrying out supervision and investigation
Will be amended to allow information obtained by the FSC and investigatory authorities from such software/digital tools to be admissible as evidence for purposes of a criminal investigation, prosecution or other related criminal or civil court proceedings.

For more information, please contact: office@rosemont.mu