The year 2019-2020 budget was entitled “Embracing a brighter future together as a nation”. Depending on which side of the fence one stands, one may call the announced measures “socially pleasing” (when the general elections are months away), whilst critics would call it a budget without sustainable measures to address challenges in industries such as sugar, textile, and tourism. However to put things in perspective external forces such as uncertainties linked to Brexit, the commercial war between the US and China, yellow vests protests in France and the Reunion Island are major hurdles which Mauritius has had to witness and is still dealing with the consequences. Bearing in mind these aforementioned external forces, the GDP growth rate is estimated to be 3.9% in 2019 and 4.1% for 2020, which is very enviable by most standards. Public debt has been a matter of live discussion in the country with figures open to debates. It was however announced in the budget speech that the public debt would be brought down to 60% of GDP by end of June 2021.
Some measures which the Honourable Pravind Kumar Jugnauth, Prime Minister, Minister of Home Affairs, External Communications and National Development Unit, Minister of Finance and Economic Development has announced are as follows:
- Peer-to-Peer lending operators will benefit from a 5-year tax holiday subject to the former being operational before 31st December 2020
- Companies incorporated in Mauritius before 30th June 2025 with a view to operating an e-commerce platform will be granted a 5-year tax holiday
- Companies engaged in innovation-driven activities will now benefit from a tax holiday of 8 years on income derived from their intellectual property assets developed in Mauritius subject to the fulfilment of pre-defined substantial activities conditions in line with BEPS requirements
- The construction of marinas will be exempted from VAT as part of the Government’s plan to incentivise the development of the ocean economy
- The introduction of Controlled Foreign Corporation rules
- The development of real estate investment trusts and e-commerce headquartering activities under an umbrella license for wealth management activities
- Global Business Companies – a company will not be considered as tax resident in Mauritius if it is centrally managed and controlled outside of Mauritius
- The legal provision relating to the arm’s length test will be fine-tuned to remove any doubt or uncertainty about its application
- An agreement with the Gujarat International Finance to enable management companies and licensed funds to operate in Gujarat
- New licenses for Fintech service providers; ‘Crowd Funding’ will be introduced in addition to establishment of a regime for Robotics and AI
Rosemont will continue to update you on significant development on these topics as legislation is implimented
For any other information/details, please contact Neermal Poonie on n.poonie@rosemont.mu