A shower of social

measures
Budget 2019-20

www.pwc.com/mu/budget
Contents
Contents

1 2 3

Our Opinion Tax Perspective Public Finance

03 07 10

4 5 6

Sector Reviews Taxation About PwC

13 34 47
14 Retrospective 35 Corporate Tax 47 Engineered for the future

15 Financial Services 38 Personal Tax 48 Your contact point

18 Hospitality, 39 Income Exemption

Manufacturing & SME Threshold

21 Agri-business & Real 40 Value Added Taxes

Estate
42 Other Taxes
25 Public Sector
44 Tax Administration
29 ICT
46 Immigration
32 The Legal reform
landscape

PwC | Budget Brief 2019 - 2020 2


Anthony Leung Shing
Country Senior Partner
PwC Mauritius
T: +230 404 5071
E: anthony.leung.shing@pwc.com
PwC | Budget Brief 2019 - 2020
A shower of social
measures
Our opinion
We note the Government’s
desire to boost purchasing
power. Today, consumption
and public spending are so
critical to GDP that these can
blur policy decisions.
3
 A shower of social measures
Our opinion

With the elections on the horizon, The Hon. At PwC, we have been advocating a more
Minister of Finance presented a social targeted approach to social benefits as, even
Budget with the objective to gain popular with imperfections, targeted programmes are
support. shown to use public money more efficiently.
The Budget felt short on this front.
In recent years, GDP growth has been
oscillating around 3.7%. Whilst inflation has
been contained and unemployment falling to
its lowest, job creation and private sector
investments have been subdued. The
ballooning budget deficit, deteriorating
balance of trade and escalating public debt
have all been source for concern. Further,
with the downturn in the textile, tourism, and
sugar sectors, there were mounting
expectations on the budgetary
announcements. Amidst this state of affairs,
has the Budget lived up to expectations?

Many observers feared populist

announcements, especially given that this
Government has pursued many socialist
goals with the introduction of minimum
wages, free university education, negative
income tax, increased pension, and so on.
PwC’s pre-Budget survey (refer to Figure 1)
confirmed that this was one of the top
concerns for the population and, as
expected, the Budget contained a shower of
social measures aimed at a wide cross
section of the population (planters, public
servants, workers, pensioners...).
We are disappointed to note that the
Government, yet again, is using the surplus
revenues (up 7.5%) arising from the fiscal
buoyancy to finance populist measures.
Better fiscal discipline would have helped
contain the recurrent budget deficit.
At a time when our competitiveness is being
eroded and investments remaining timid, we
welcome the measures to promote further
business facilitation, the incentives under
Law Enforcement Message Switch (LEMS),
as well as the push for innovation. The
pursuit of the ‘Moris Nou Zoli Pei’ campaign
is also a positive aspect of this Budget as it
will promote a more sustainable and
environment-friendly model. These measures
should not only help our traditional industries
but also lead to the emergence of new
growth pillars. However, we have raised
concerns over the Government’s drive to fuel
growth through public spending and
consumption, as our productive assets are
being diverted.

Continued on next page

PwC | Budget Brief 2019 - 2020 4

 A shower of social measures
Our opinion (cont.)
Again, we note the Government’s desire to
boost purchasing power by further increasing
pension, making an interim pay allowance to
public servants, reducing the price of cooking
gas or maintaining the subsidies on rice,
flour, and so on. Today, consumption and
public spending are so critical to GDP [refer
to Figure 2] that these can blur policy
decisions.
Figure 2 : GDP Composition(Rs m)
The public infrastructure programme has
been a key feature in recent budgets and the
Minister reported good progress, especially
the Metro Express and Côte d’Or multisport
complex. With empirical evidence showing
that such large infrastructure projects are
prone to cost overruns in excess of 50%, and
the recent history of overruns (the Bagatelle
Dam costing twice more at Rs6.2bn or the
Terre Rouge Verdun motorway tripling in cost
at Rs5.8bn), we hope that there are no
surprises ahead with the Rs18bn Metro
Express project.
PwC | Budget Brief 2019 - 2020
We have experienced a period of ‘jobless’
growth in recent years, with little net job
creation. There are currently around 20,000
youths unemployed and the country is facing
difficulties in absorbing new entrants into the
labour market. The current skills mismatch
highlights issues with the education system
and the proposed reforms to modernise the
education were needed.
Mauritius spends around USD2,600 on each
student of compulsory school age, similar to
South Africa (USD2,200) but over five times
less than Singapore (USD14,500) [refer to
Figure 3]. Much public funds have been
directed to social protection (up 15% from
2017) against an increase of only 7% in
education; we are pleased that the
Government has taken active measures to
stimulate training and innovation in the
education sector.
Figure 3 : Education spend per student
2018
Continued on next page
5
 A shower of social measures
Our opinion (cont.)

The Budget also announced some reforms in Looking back at this Government’s mandate,
order to promote a more efficient public besides infrastructure and socialist
administration and, although there has been measures, there has been little progress
limited details in the Budget Speech, the sale made in tackling public sector inefficiency,
of non-strategic assets to reduce the public structural bottlenecks, or labour productivity
debt as well as the simplification of the gap. While an attempt has been made in this
Public-Private Partnership Act are steps in year’s Budget, it did not go far enough and,
the right direction. clearly, the Government has elections in
mind.
The Government also addressed concerns
over public debt and aims to curtail this level
to 61.6% of GDP in the next fiscal year to
everyone’s surprise by using the
accumulated undistributed surplus of Rs18bn
held at the Bank of Mauritius. Our concern is
that such an approach may have broader
implications on the country’s monetary policy,
ability to manage its foreign exchange risk or
reliance on more domestic debt funding in
the short-term.

PwC | Budget Brief 2019 - 2020 6

 Tax Perspective

2
Dheerend Puholoo
Tax Partner
PwC Mauritius
Tax helps, but bolder decisions
T: +230 404 5079 around logistics and ancillary
E: d.puholoo@pwc.com facilities should accompany the
fiscal measures to incentivise
foreign players to use
Mauritius as a platform for
sophisticated activities.

PwC | Budget Brief 2019 - 2020 7

 Tax
Perspective (cont.)
The Budget 2019-20 (“the Budget”) lays the
foundation for a brighter future, with as
objective to make Mauritius a high-income
country, a more inclusive and innovative
nation, where development is sustainable.
Among others, the Hon. Minister of Finance
announced measures such as strengthening
the economic pillars, expanding economic
space, promoting a safer and more secure
living environment to achieve the above aim.
Tax Measures
There will be tax holiday of four (4) years for
companies on income derived from
bunkering of low Sulphur Heavy Fuel Oil. We
saw the introduction of similar tax
exemptions in the past to develop Mauritius
as a Petroleum Hub.It remains questionable
whether these few exemptions are sufficient
for Mauritius have its footprint in the industry.
Tax helps, but bolder decisions around
logistics and ancillary facilities should
accompany the fiscal measures to incentivise
foreign players to use Mauritius as a platform
for sophisticated activities.
Last year, we also saw major tax reforms in
the Global Business Sector prompted by
pressure from international bodies such as
the OECD and the EU. The effects of such
reforms are yet to be seen, but it is
encouraging to see that there are measures
in this Budget aiming to revamp Mauritius as
an International Financial Centre. Special tax
regimes to promote the development of Real
Estate Investment Trusts, wealth
management activities or a scheme for
headquartering e-commerce activities are
welcome.
PwC | Budget Brief 2019 - 2020
Past budgets did not produce the desired
results; will these fiscal incentives in isolation
suffice?
Income derived by banks from Global
Business Companies will not be subject to
special levy. This was an awaited measure to
ensure parity with the previous tax regime on
the special levy for Banks. Further, the
income of banks derived from SMEs in
Mauritius (such as enterprises engaged in
agriculture, manufacturing or the production
of renewable energy) and from operators in
African or Asian countries will be taxed at a
reduced rate of 5%. This will no doubt
encourage banks support enterprises in the
relevant sectors.
The Minister also announced a few
measures that aim to promote Mauritius as a
greener economy: the excise duty on non-
fossil outboard motors will be abolished;
individual taxpayers will be able to deduct the
total investment on the acquisition of a fast
charger for an electric car, while corporates
can claim twice the amount from their taxable
income. In addition, hotels will be allowed a
deduction of 150% of the expenses incurred
on cleaning, renovation and embellishment
works in public realm.
Continued on next page
8
 Tax
Perspective (cont.)

Tax Administration Conclusion

Further improvement in the Tax
Administration is also one of the focus of the
present government. In the past years, we
saw the introduction of the Expeditious
Dispute Resolution and Alternative Tax
Dispute Resolution panels, and these have
been quite successful. Around 194 cases
were resolved with a tax yield of Rs500m,
and enlarging the scope of these panels to
cover the Environmental Protection Fee and
Duties and Custom laws is a welcomed
initiative
This Budget has introduced a few notable
measures that will improve tax administration
and tax collections. Dispute resolutions at the
Objection and ARC levels have improved but
it is becoming critical that we find settlements
for the 3,509 pending cases with a tax value
of Rs15bn. More importantly, with the ever-
changing tax environment, Mauritius will
have to revisit continuously its model; unless
we take bolder decisions, it will be a
challenge for Mauritius to sustain as a robust
financial sector.

The Assessment Review Committee (ARC)

was initially set up to ease proceedings on
tax disputes. However, the filing
requirements of the ARC are quite
demanding, it has become a challenge and a
financial burden for taxpayers (e.g. the filing
of a Witness Statement and Statement of
Case) when making representations.
Although taxpayers will now have more time
to file the documents, will that really relieve
them?

The Voluntary Disclosure of Income Scheme

has been re-introduced, and will cover SMEs
and taxpayers holding foreign assets. There
will be a complete waiver of the applicable
penalty and interest on any undeclared
income. We hope that the waiver of the
interest and penalties will be extended to
genuine and compliant taxpayers who are
under tax investigations by the tax
authorities.

PwC | Budget Brief 2019 - 2020 9

 Public Finance

3
Deepa Jhamna
PwC Mauritius

There is no consensus on what

T: +230 404 5308
E: deepa.j.jhamna@pwc.com
constitutes an ideal Debt-to-
GDP ratio. Our focus should
remain on the sustainability of
public debt levels.

PwC | Budget Brief 2019 - 2020 10

 Public
Finance (cont.)

Budget balance

6%
4% 8%
2019/20 Budget Deficit 10%
2%
Rs
Rs16.9bn
3.2% year-on-year increase

Revenue

Value Added Taxes Rs38.0bn

Corporate/Personal tax Rs29.1bn Expenditure

Other taxes on g&s* Rs27.5bn Employee Major capital projects
Rs32.7bn
compensation
Property taxes Rs6.7bn Metro Express – Rs7.4bn
Old age pension Rs27.6bn
Grants Rs6.3bn
Subsidies and Grants Rs24.2bn
Rs27.6bn Multisports Complex at Côte D'Or
– Rs2.0bn
Taxes on foreign deals Rs3.3bn
Capital expenditure Rs17.0bn
Rs7.1bn
Social contribution Rs1.3bn Infrastructure upgrade (including roads,
Interest Rs13.8bn drains and amenities) – Rs1.8bn

Other revenues Rs9.4bn

Other social benefits Rs17.0bn
Rs7.1bn
Health projects (including new cancer

Rs121.6bn
centre and eye hospital) – Rs1.1bn
Other expenses Rs16.1bn

Rs138.5bn

*g&s refers to goods and services

600 5%
4.0% 4.1%
3.9% 3.9% 3.9%
GDP growth rate 500
3.5% 3.4% Rs 442k 4%
Rs 402k Rs 414k
Rs 381k
400 Rs 362k
Rs 344k
Rs 311k 3%
For the first time in over 5 years,
300
real GDP growth rate is forecast to
2%
reach the 4.0% mark by June 2020 200
on the back of a construction sector 1%
100
boosted by major public
infrastructure projects, stable - -1%
inflation and declining 2014 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21

unemployment. Actual GDP per capita Actual real GDP growth rate

PwC | Budget Brief 2019 - 2020 11

 Public
Finance (cont.)

Public Debt
13%
2019/20

11%
2018/19* 2018/19
6%
11%
Public Debt
2019/20*
composition

77%
Rs100m Rs200m Rs300m 76%
*does not take into account consolidation adjustment 81%
80%

According to the World Bank, a Debt-to-GDP ratio in

excess of 77.0% over an extended period slows down a Govt. securities issued for meeting
country’s economic growth. For emerging countries, it borrowing requirements
found that every percentage point of debt above 64.0% is Govt. securities issued for mopping up
expected to slow real growth by 0.02 percentage point excess liquidity
every year. Mauritius has posted a Debt-to-GDP ratio of Short-term external debt
65.0% for 2018/19 with an ambitious target of nearing Long-term external debt
60.0% within the next two years. Long-term debt liability
Public enterprise debt

Debt-to-GDP ratio
350,000 66.1% 65.0% 61.6% 70.0%
63.4%
60.2% 61.4%
300,000 322,621 324,521 60.0%
295,660 302,149
250,000 50.0%
259,374
241,314
200,000 40.0%

150,000 30.0%

100,000 20.0%

50,000 3.9% 3.7% 3.4% 10.0%

3.1% 3.2% 3.3%

- 0.0%
2014 2015/16 2016/17 2017/18 2018/19 2019/20

Debt-to-GDP ratio Actual Public Debt (Rs Forecast Public Debt

Actual budget balance m)
Forecast budget (Rs m)
Forecast Debt-to-GDP ratio
as a % of GDP balance as a % of
GDP

PwC | Budget Brief 2019 - 2020 12

 Time to deliver
Sector Reviews

14 | Retrospective

15 | Financial Services

18 | Hospitality, Manufacturing & SME

21 | Agri-Business & Real Estate

25 | Public Sector

29 | Information and Communication Technology (ICT)

32 | The Legal reform landscape

PwC | Budget Brief 2019 - 2020 13

Retrospective
Previous Budget (June 2018)

Our take on how many measures Retrospectives in videos:

announced in the Budget 2018-19 were
completed by sectors.

Financial Services – 71%

Hospitality– 50%

John Li,
Speaks about Financial Services
Agri-Business – 70%

ICT – 25%

Jean-Pierre Young,
Manufacturing – 38% speaks about Information and
Communications Technology (ICT)

Real Estate – 76%

Public Sector – 38%

Olivier Rey,
speaks about Manufacturing and
Hospitality
SME – 83%

PwC | Budget Brief 2019 - 2020 14

 Financial
Services

By diversifying our product offering and

strengthening the regulatory framework, we are
moving in the right direction to position the
Mauritius IFC and to implementing the Blue
Print. However, the measures around
PHOTO attracting foreign talents and developing local
resources remain quite vague.

Key Measures
Real Estate Investment Trusts
Attractive tax regime and new rules

John Li Levy for Banks

Partner Increase in the rate from 4% to 4.5% and no
PwC Mauritius foreign tax credit
T: +230 404 5128 5 year Tax Holiday
E: john.s.li@pwc.com Peer-to-Peer lending and e-commerce platform
operators

New Trading Platform

For Medium sized profitable enterprises not
qualifying for listing on the official and DEM
markets
Financial Crime Commission
Setting up of a new commission coordinating with
other agencies

Crowd Funding
New licensable activity

PwC | Budget Brief 2019 - 2020 15

 Financial
Services (cont.)
Asset Management
● New framework for Fund administration
and Fund management
● Mauritian licence funds and
management companies to operate in
the Gujarat jurisdiction further to
expected agreement with the Gujarat
International Finance Tec-City
● Development of the Real Estate
Investment Trusts with the setting up of
an attractive tax regime and new rules
● Umbrella licence for wealth
management activities
● Reform of the Partial Exemption Tax
Regime of Global Business companies,
namely to define the detailed substance
requirements and laying down
conditions for companies outsourcing its
core generating activities
● Setting up of a “single-window system”
for submitting documents for financial
services and global business
applications
● Amendment of the Income Tax Act to
determine when companies will be
considered as tax resident in Mauritius
● Revamping of the existing Special
Purpose Fund regime
PwC | Budget Brief 2019 - 2020
Banks
● Income derived from Global Business
Companies exempted from the levy
under VAT Act
● Levy increased from 4% to 4.5% of
operating income for a bank having
operating income over Rs1.2bn
● A cap will be introduced on the increase
of levy payable.
● No foreign tax credit will be allowed
against the special levy
● Reduced tax rate of 5% applicable on
chargeable income of a bank in excess
of its chargeable income in the base
year (YOA 2017/18) provided certain
pre-conditions are met
● BOM and the FSC will explore the
convergence of Private banking and
Wealth Management licences
● BOM will consider applications for
banking licence from a subsidiary of a
bank incorporated abroad
16
 Financial
Services (cont.)

Fintech development E-Commerce

● Setting up of a scheme for the head

● Establishment of a regime for Robotics
and AI enabled financial advisory
services
● New licence for Fintech Service
providers and encouraging self-
regulation for Fintech activities.
● Crowd-funding will become a new
licensable activity
● FSC will Introduce e-signatures and e-
licences on a pilot basis
Other Financial Services
● New trading platform at the Stock
Exchange of Mauritius for medium
sized profitable enterprises not
qualifying for listing on the official and
DEM markets
● Setting up of a framework for Green
finance
● 5-year tax holiday for Peer-to-Peer
lending operators starting operations
before 31 December 2020
quartering of e-commerce activities
● 5 year tax holiday for companies
(incorporated before 30 June 2025)
setting up an e-commerce platform
Regulatory framework
● Setting up of a Financial Crime
Commission that will coordinate with
other investigative agencies
● Development of a financial data
handling code of conduct
● Introduction of industry-wide Practice
Notes on handling clients’ requests
● Reinforcement of the Financial Services
Act to combat financial crime
● Fine not exceeding Rs5m may be
imposed on a licenced auditor or an
audit firm upon breach of the Financial
Reporting Act or any rule, code,
guidelines or auditing standards

● 80% partial exemption regime extended

to cover companies engaged in leasing
and provision of international fibre
capacity, reinsurance and reinsurance
brokering and in the aircraft industry

PwC | Budget Brief 2019 - 2020 17

 Hospitality,
Manufacturing & SME

The Government has listened to our operators,

especially on the sustainability front! It is
however disappointing that the budget remains
silent on the immigration policy and the
regulation of the informal sector for the
PHOTO hospitality sector.

Key Measures
Moris Nou Zoli Pei
Solid measures taken to make Mauritius a
sustainable and environmental-friendly country
Rs535m
The amount allocated to MTPA to boost the
Olivier Rey
tourism sector
Partner
PwC Mauritius Rs1bn
The amount earmarked to support modernisation
T: +230 404 5145 of technologies and processes in the
E: olivier.rey@pwc.com manufacturing sector

80 hectares
Land allocated to a Textile City in Madagascar

LEM I rate for SMEs

Decrease of the interest rate under the Leasing
Modernisation Schemes (LEMS) I and SME
Factoring Scheme from 5.5% to 3.9%

LEMs II for Mid-Market Enterprises (MMEs)

Decreased financing cost for MMEs from 6% to
4.25%

PwC | Budget Brief 2019 - 2020 18

 Hospitality,
Manufacturing & SME (cont.)

Manufacturing Hospitality

● Rs160m alloted to the Mauritius

● ISP Limited created and provided with
Tourism Promotion Authority (MTPA) to
Rs1bn to support enterprises adopt new
revive the Shanghai and Kenya routes
technologies and arrange for financial
support towards modernisation of
● Construction of a Passenger Cruise
processes
Terminal Building with shopping and
other facilities to accommodate
● Rs120m allocated to maintain export
additional passengers
competitiveness to Europe
● A national cleaning and embellishment
● Economic Development Board to help
campaign to promote Mauritius as a
companies in financial difficulties by
clean destination and tax incentive for
looking for investors and strategic
hotels spending on cleaning and
partners
embellishment works
● American firm engaged to assist local
● Collaboration with the private sector to
companies to adapt to the needs of the
develop 200km of walkable and cycling
international market
trails over the island
● Development of a Textile City on 80
● Construction of a new road to connect
hectares of land in Madagascar
the airport to Mahebourg to promote the
development of Mahebourg as a tourist
● Extension of Cargo and Freeport area
village
at the airport towards Rose-Belle
Industrial park to accommodate light
● Introduction of a VAT refund scheme on
industries
accomodation costs for events with at
least 100 foreign attendees staying for
● 3% income tax on profit from local sale
a minimum of 3 nights to encourage
of goods for freeport operators or
Meetings Incentives Conferences and
private freeport developer engaged in
Exhibitions tourism
manufacturing

PwC | Budget Brief 2019 - 2020 19

 Hospitality,
Manufacturing & SME (cont.)

SMEs and MMEs

● Set up of a design centre for leather

● Existing Development Bank of Mauritius products in Coromandel to assist and
(DBM) Micro-Credit Loan Scheme provide training to SMEs on 3D
increased from Rs250,000 to Rs500,000 technologies

● The Small and Medium Enterprises ● SME Employment Scheme extended

(SME) financing scheme extended for an to enterprises with turnover of up to
additional 3 years Rs100m

● The cost of financing under SME Equity
Fund will reduce from 8% to 6% as from 1
July 2019 and has been extended to
MMEs as well
● The suspension of trade fees of up to
Rs5,000 extended for another 3 years
● Creation of new MME Financing
Scheme with concessionary interest
rate from commercial banks
● Credit facility in USD and EUR
introduced for export factoring
services for MMEs

● The grant per SME operating under the

label of 'Made in Moris' increased by
Rs5,000

● A one-off grant of Rs3,000 offered to

SMEs subscribing to the E-Commerce
Platform of the Mauritius Chamber of
Commerce and Industry (MCCI)

● The Margin of Preference for contracts

under Public Procurement for
manufactured products under the 'Made
in Moris' label increased from 20% to
30%

PwC | Budget Brief 2019 - 2020 20

 Agri-Business &
Real-Estate

We applaud the push for greater food self-sufficiency

and re-cultivation of lands but there is no measure
of note for the frail sugar industry. The measures for
the small cane planters are band-aids which will not
stem the flow. We wait with bated breath the
strategic options of the World Bank for the sugar
industry. Hopefully, we will not have run out of time
by then.

Key Measures
Rs25,000 per ton of sugar
for the first 60T of sugar for all planters

Olivier Ma Rs2.2bn for a breakwater at Fort WIlliam

Partner to allow for safe mooring of c.120 fishing vessels
PwC Mauritius
Free land conversion for smart city promoter
T: +230 404 5044 One hectare of agricultural land for every Rs5.5m
E: olivier.ma@pwc.com of expenditure incurred.
Sugarcane biomass
National Biomass framework to be developed for
electricity generation.

Cane Replantation Programme

Funds (unquantified) will be provided to encourage
planters to re-cultivate their lands
Push for greater food self-sufficiency
Pig farms will be rehabilitated, 2 cattle farms being
set up and a sheep farm will open at Salazie

100 more sheltered agri farms

will be constructed over the next two years

PwC | Budget Brief 2019 - 2020 21

 Agri-Business &
Real-Estate (cont.)
Sugar Industry
Measures bringing relief to small planters
and the industry:
● All planters will benefit from a one-off
price of Rs25,000 per ton of sugar -
more than double the current price of
sugar - for the first 60 tons of sugar
accrued to them
● National Biomass framework to be
developed for the use of sugarcane
biomass, including cane trash, for
electricity generation
● Government has already sought the
assistance of the World Bank to provide
strategic policy options for making the
sugar cane industry sustainable, in the
medium and long-term
● Funds [quantum not announced] under
the Cane Replantation Programme to
encourage planters to bring their lands
back under cultivation
● Waiver of 50 percent of the advance on
fertilizers provided to planters through
the Mauritius Cane Industry Authority
(MCIA)
● Waiver of the insurance premium paid
by planters (up to 60 tons of sugar) for
Crop 2019
PwC | Budget Brief 2019 - 2020
● The MCIA will get Rs15m to acquire
equipment for harvesting sugar cane of
small planters
● The MCIA will meet the shortfall arising
from the suspension of CESS payments
for Crop 2019
Tea Industry
● Government is working with the FAO for
the branding of the Mauritian tea as a
pesticide free product with unique
health benefits
● Doubling the three months winter
allowance to tea growers during the low
harvest winter season
● Tea growers will also benefit from the
concessionary road tax allowance on
double cab pick-ups
Bee-keeping
● More bee-keeping zones will be
developed at River Tamaka and Palma
● Exemption of duty on the purchase of
single/double space cabin vehicles
● Concessionary road tax on
single/double space cabin vehicles
registered to bee-keepers holding a
minimum of 20 beehives
22
 Agri-Business &
Real-Estate (cont.)
Flowers
● Advice on the production of
Chrysanthemum and the setting up of
greenhouses will be sought
Livestock
● Rehabilitation of pig rearing sites at St
Martin and Bassin Requin
● Cattle breeding - a heifer farm will be
operational in Melrose and a livestock
farm will be set up next to the heifer
farm
● Sheep and goat breeding - a farm will
soon be operational at Salazie to
reduce our dependence on imports
Others
● Agricultural stations of FAREI will have
ripening plants for bananas and
tomatoes
● 100 more sheltered farms will be
constructed across the island over the
next two years
PwC | Budget Brief 2019 - 2020
Ocean Economy
● Rs2.2bn in another breakwater at Fort
William to allow for the safe mooring of
c.120 fishing vessels and create a fully
functional fishing port
● Daily rate of bad weather allowance for
fishermen will be increased from Rs310
to Rs340
● An online and physical fish auction
market will be set up to act as an
interface between local fishermen,
fishing companies and buyers both local
and international
● A stock assessment will be conducted
to better manage and protect species
such as lobsters, squid and other small
commercial pelagic fish
● Rs12m for the setting up of a
Cooperative Seafood Processing Unit at
Tamarin
● Grant of Rs25,000 to twenty
cooperative societies for setting up
ornamental fish breeding farms
● Grant to fishermen cooperatives to
purchase outboard engines and fishing
nets is being increased from Rs60,000
to Rs80,000
23
 Agri-Business &
Real-Estate (cont.)

Rental of State Land Construction Industry Development Act

● A promoter implementing a private ● The minimum threshold, requiring any

health institution or ayurvedic wellness person undertaking construction works
centre project on State land will benefit to be registered with the CIDB, is being
from a 75% reduction in annual rent for increased from Rs500,000 to Rs1m
the first 10 years of the lease

Sugar Industry Efficiency Act

● A promoter of a smart city project which

bears cost of road infrastructure will be
allowed to convert, from agricultural
use, one hectare of land free of land
conversion tax for every Rs5.5m of
expenditure incurred

PwC | Budget Brief 2019 - 2020 24

 Public
Sector

A number of measures have been announced,

some carried over from the previous budget. The
key to success will be the ability to realise them
and generate the productive capacity we desire.

Key Measures

Rs17.1bn
is the budget for the education sector

Investment of Rs12bn by MPA

Rajeev Basgeet For the construction of a breakwater to reduce
Partner downtime at the port during bad weather conditions
PwC Mauritius
Medical Insurance Scheme
T: +230 404 5148
E: rajeev.basgeet@pwc.com Rs200m for a Medical Insurance Scheme for
public sector employees

Waste management and recycling

A waste to energy project will be implemented from
1,000 tons of daily municipal waste. A tipping fee of
Rs300 per ton for 600 tons of waste daily earmarked
for recycling

Construction of 6,000 units

Dwelling for low income families over the next 3 years

11,000 families
To be given free access to broadband Internet

PwC | Budget Brief 2019 - 2020 25

 Public
Sector (cont.)
Public Infrastructure
● Rs1.5bn has been earmarked to
progress previously announced projects
and another Rs2bn shall be invested in
new infrastructure projects namely for
construction and upgrading of fly-overs
and roads
● Renovation of the Port Louis Waterfront
at an estimated of Rs200m
● Construction of new terminal at
Plaisance to increase capacity for
8,000,000 passengers p.a.
● Investment of Rs12bn by MPA for the
construction of a breakwater to reduce
downtime at the port during bad
weather conditions
● The Airport of Mauritius Ltd will
construct a new runway at Plaine Corail
Airport to enable landing and take-off of
larger aircrafts
● Rs1.2bn for community-based projects
across the island, including
constructions of gymnasiums, football
fields, health tracks, children
playgrounds, market fairs and halls
amongst others
PwC | Budget Brief 2019 - 2020
Utilities
● Construction of a dam at Rivière des
Anguilles
● A Renewable Energy Roadmap to
optimise the use of the various
renewable sources of energy to
produce electricity
● Removal of quota for production of
electricity from solar sources and
removal of the monthly fee for supplying
electricity to the national grid from solar
energy sources
● A waste to energy project will be
implemented from 1,000 tons of daily
municipal waste
● Rs4bn will be invested in wastewater
management over the next 3 years
● Rs1.5bn will be allocated over the next
3 years to replace old and defective
pipes across the country
● To reach out to an additional 37,500
households, Rs300m will be invested
over the next 3 years to increase
support under the Water Tank Scheme
26
 Public
Sector (cont.)

Education, Healthcare and Leisure ● Rs11m to revamp the Women’s

Empowerment Centres
● The budget for the public health sector
has been increased to Rs13.1bn
● Recruitment of 8 educational
psychologists, 6 educational social
● The implementation of an e-health
workers and 34 discipline masters
project for data to be available to all
hospitals across the country in real
● Creation of a Wage Guarantee Fund
time
which will guarantee payment of up to
Rs50,000 to workers who lose their jobs
● Provision for 5 new mediclinics and 19
in case of insolvency
health centres
Law and Order
● Rs600m has been allocated for
financing the announced Free Tertiary ● The Drug Use Prevention Programme
Education Scheme which is currently in place in 48
secondary schools will be extended to
● Rs138m to NGOs for the running of all secondary schools
Special Education Needs Schools
● The Supreme Court Building will be
● Funds have been earmarked for the completed by the end of 2019
construction and upgrading of 8
government schools, 6 multi-purpose ● Setting up of a new District Court for
halls, 4 playfields, 3 new Science the upper Plaines Wilhems at Forest
blocks in secondary Schools, and 58 Side
specialist rooms in state secondary
school ● 3 new police divisional headquarters
and 3 new police stations
● Creation of an Education Hub at Côte
D’Or ● As part of the Safe City Project, 4,000
Intelligent Surveillance Cameras and
Employment
300 Intelligent Traffic Surveillance
● Recruitment of 538 medical and non- Cameras are being installed
medical personnel
● Rs 275m have been allocated for the
● Rs200m for a Medical Insurance Road Safety Programme
Scheme for public sector employees

PwC | Budget Brief 2019 - 2020 27

 Public
Sector (cont.)

Other measures

● Provision of a tipping fee of Rs300 per

ton of waste taken from transfer
stations for recycling of 600 tons of
waste per day

● Setting up of a new Driving Licence and

Test Centre at Centre de Flacq

● Fire and Rescue Service will acquire a

vehicle for rapid and effective
intervention during incidents involving
hazardous materials, 3 swift water
rescue vehicles and 3 water tenders

● Rs27bn has been earmarked for the

Ministry of Social Security, which
represents an increase of 9.3% on last
year’s budget

● Monthly carer’s allowance from Rs3,000

to Rs3,500 for some 23,000 bedridden
pensioners

● The old age pension has been

increased to Rs6,710 per month

PwC | Budget Brief 2019 - 2020 28

Information and
Communications Technology

It is encouraging to see that Government is

embracing technology to bring the much needed
improvement in efficiency and quality of services
to the citizens. The measures announced around
capacity building and Fintech will increase the
country’s attractiveness to investors as well as
address job creation.

Key Measures
Improving Services to Citizen
Placing citizen at the center

Promoting the E-Commerce business

Jean-Pierre Young Attracting investments
Partner
PwC Mauritius Business Facilitation
Improving Government to Business relationship
T: +230 404 028
E: jean-pierre.young@pwc.com
Digitisation of Government Services
Adoption of Technology to improve efficiency

Developing and attracting talents

Encouraging the youth towards Technology

Fintech hub
Pursuing the development of Mauritius as a
Fintech hub

PwC | Budget Brief 2019 - 2020 29

 Information and
Communications Technology (cont.)

Improving Services to Citizen Business Facilitation

● Introduction of e-Payment system by ● Implementation of e-Registration

rolling out of the National Payment
Switch by the Bank of Mauritius
● Ease accessibility to e-services for
citizen by implementing of a National
Authentication Framework
Platform for consultants and contractors
● Online application facilities for import
and export permit through TradeNet
Digitisation of Government Services

● Move towards a paperless ● Implementation of the E-Health project

administration by making online facilities to improve the quality of public health
available to the public, including: services

○ Delivery of free copies of birth and ● Adoption of the ‘Require-Once Principle’

marriage certificates
○ Application for enrolment of
children in primary and secondary
schools
○ Searching information on land titles
○ Registering of vehicles
○ Making application for SC and HSC
examinations by private candidates
for citizen information
● Counter fake driving licenses production
by issuing of smart driving licence card
● Establishment of a National Traffic Data
Management System to better manage
congestion

Promoting the E-Commerce business ● Implement an Advance Passenger

Information System at the airport
● The Financial Services Act will be
amended to introduce a scheme for the
● Setting an integrated Digitalised Queue
Head Quartering of E-Commerce
Management System to manage
activities in Mauritius
queues more efficiently
● 8 years tax holidays, for companies
● Development of the smart grid through
involved in innovation driven activities,
the installation of 75,000 smart meters
on income derived from intellectual
by the CEB
property assets developed in Mauritius

● 5 years tax holiday for companies

setting up an e-commerce platform
provided they are incorporated in
Mauritius before 30 June 2025

PwC | Budget Brief 2019 - 2020 30

 Information and
Communications Technology (cont.)

Developing and attracting talents Fintech hub

● Financial Services commission will:

● Partnership between the Université des
Mascareignes, Université de Limoges
○ Establish a regime for Robotics
and Université de Nice to offer a
and Artificial Intelligence enabled
Masters in Artificial Intelligence and
financial advisory services
Robotics
○ Introduce a new licence for
Fintech Service providers
● Set up of a 6 months Artificial
○ Encourage self-regulation for
Intelligence Development Programme
Fintech activities in consultation
for 100 students
with the United Nations on Drugs
and Crime
● Introduction of a “Post-Study Work
○ Introduce the use of e-signatures
Visa” to allow international students to
and e-licences on a pilot basis
work for 3 years after completion of
○ Create Crowd Funding as a new
their undergraduate course in ICT,
licensable activity
Fintech, Artificial Intelligence and
Biotechnology
● Establishment of the Central KYC
Registry with the collaboration of the
● Free access to broadband internet to
Bank of Mauritius and the Financial
11,000 families registered on the Social
Services Commission
Register of Mauritius
● Issuance of a “Sandbox Licence” to
● Capital outlay requirement of
foreign companies interested in
USD40,000 under the innovator
developing online betting platforms and
Occupation Permit for Start-up will be
who explore risk-assessed Blockchain
waived
and Crypto Currency initiatives

PwC | Budget Brief 2019 - 2020 31


Anne-Sophie Jullienne
Managing Partner | Barrister
PwC Legal (Mauritius) Ltd
T: +230 404 5401
E: anne-sophie.jullienne@pwclegal.mu
We are a Mauritius law firm which is
part of the PwC network of firms, but
operates independently from all firms in
the network. We are part of the world’s
largest legal services network by
geography, with over 3,500 lawyers in
more than 100 countries.
We accompany local and international
clients on their projects from inception
to execution.
PwC | Budget Brief 2019 - 2020
The legal reform
landscape
The reforms’ focus on good governance and
increased enforcement powers given to the
regulator are necessary to improve the credibility
and reputation of our jurisdiction on the
international scene. The extent to which these
reforms will achieve this objective will, however,
depend on our ability to demonstrate that we are
able to turn reforms into actions and take offenders
to task.
New Licences and Schemes
❖ New licensed activities: crowdfunding, fintech services
provider, robotic and AI advisory services, online betting
platform for foreigners, e-commerce headquarters, Real
Estate Investment Trusts
❖ Umbrella licences to be issued for wealth management
and private banking activities
❖ New trading platform for medium-sized profitable
enterprises to allow them to raise capital and trade their
shares
Banking & Non-Banking Financial Services
❖ BOM not subject to Equal Opportunities Act when
appointing consultants
❖ BOM entitled to consider applications from subsidiaries
of banks incorporated abroad
❖ New BOM powers to suspend banking licences
❖ New reporting obligations imposed on directors in
relation to company, including AMC/CFT matters
❖ Wilful default of borrowers on loans to be made a
criminal offence
❖ Protection afforded to whistleblowers
❖ Obligation on financial institutions to put in place
procedures requiring employees to disclose interests
and employees to be prohibited from taking part in
deliberations/decisions
32
 The legal reform
landscape (cont.)
Protection of Minority Investors
❖ Disclosure by listed entities of transaction
of a value of at least 10% of company’s
assets
❖ Disclosure of individual remuneration of
directors in annual report
❖ Declared dividends to be paid no later
than 15 months, subject to solvency test
❖ Disqualification of directors in case of a
successful claim made by shareholders
Definition of Beneficial Owner
❖ ‘Beneficial owner’ will be defined in
Companies Act / Limited Liability
Partnerships Act / Limited Partnerships
Act
Gender Diversity
❖ At least one woman on the board of
public companies and statutory bodies
Combating Fraud, Corruption and Financial
Crime
❖ Sandbox licencing framework for fintech
activities to be upgraded in line with UN
Office on Drugs & Crime policies
❖ Whistleblowers to benefit from immunity
in relation to disclosures
❖ Creation of a Financial Crime
Commission to ensure coordination with
investigative agencies (ICAC, FIU and
enforcement department of the FSC)
❖ Licensed auditors to be subject to
relevant regulations issued by the FIU
❖ Licensed auditor/audit firm will be liable to
a fine not exceeding Rs5m in case of
breach of the FRA or any rules, code,
guidelines or standards relating to
auditing issued by the FRC
PwC | Budget Brief 2019 - 2020
Good Governance and Integrity Reporting
Act
❖ Threshold applicable to unexplained
wealth will be decreased from Rs10m to
Rs2.5m
❖ Properties acquired, in possession,
custody or control of a person before 1
January 2016 will fall under the scope of
the Act
Gambling Regulatory Authority
❖ Additional responsibility placed on the
Horse Racing Organiser to ensure same
treatment to all licensees of the GRA
including but not limited to the display of
odds and other information to correct any
unfair treatment
❖ Powers of the GRA to seek court order to
obtain information from telecom
operators regarding phones and phone
records in relation to jockeys or horse
owners
Employment
❖ Calculation of gratuity on retirement will
be amended to be based on the full
length of service of a worker irrespective
of the number of employers worked for
and a Portable Gratuity Fund will be set
up for that purpose
❖ Creation of a fund guaranteeing workers
who lose their job following insolvency, a
payment of up to Rs50,000
Environmental Impact Assessments
❖ Minister of Environment will have powers
to approve or refuse an EIA licence within
5 days, or otherwise refer the decision to
a Technical Assessment Committee
within 7 days
33
 Taxation

5
35 | Corporate Tax

38 | Personal Tax

39 | Income Exemption Threshold

40 | Value Added Taxes

42 | Other Taxes

44 | Tax Administration

46 | Immigration

PwC | Budget Brief 2019 - 2020 34

Corporate
Tax
Tax Residence
● A company will not be considered as
tax resident in Mauritius if it is centrally
managed and controlled outside of
Mauritius
Partial Exemption Regime
● 80% partial exemption regime extended
to cover companies engaged in:
○ leasing and provision of
international fibre capacity
○ Reinsurance and reinsurance
brokering
○ Sale, financing arrangement and
asset management of aircraft and
its spare parts, including aviation
related advisory services
● Income Tax Regulations 1996 (ITR) will
be amended to address:
○ Detailed substance requirements
for companies to benefit from the
partial exemption regime.
○ Conditions to be satisfied for a
company outsourcing its core
income generating activities
PwC | Budget Brief 2019 - 2020
● The conditions for the outsourcing
company will include:
○ Ability to demonstrate adequate
monitoring of the outsourced
activities
○ Conducting the outsourced
activities in Mauritius
○ Not counting the economic
substance of service providers
multiple times by multiple
companies when evidencing their
own substance in Mauritius
Anti Abuse Rule
● Controlled Foreign Company (CFC)
rules will be introduced
Real Estate Investment Trusts (REITs)
● New attractive tax regime will be
introduced to promote the development
of REITs
Accelerated Depreciation
● Accelerated depreciation threshold
raised from Rs30,000 to Rs60,000 for
capital expenditure incurred on plant
and machinery
35
 Corporate
Tax (cont.)
Taxation of Banks
● Levy expensed by banks under Value
Added Tax (VAT) Act is not tax
deductible for corporate tax purposes
● Reduced tax rate of 5% applicable on
the chargeable income of a bank in
excess of its chargeable income in the
base year, YOA 2017/2018, if the bank
grants at least 5% of its new banking
facilities to the following categories of
businesses in Mauritius:
○ Small and Medium Enterprises
(SMEs)
○ Enterprises engaged in
agriculture,manufacturing, or
production of renewable energy
○ Operators in African or Asian
countries
PwC | Budget Brief 2019 - 2020
Additional Tax Deduction
● 150% tax deduction of case filing fee
from taxable income for parties
attempting mediation, conciliation and
arbitration
● 150% tax deduction on cleaning,
renovation and embellishment works for
hotels
● Double deduction for expenditure
incurred on fast charger for electric cars
Carry Forward of Tax Losses
● Effective as from 1 July 2018,
companies facing financial difficulty can
carry forward unrelieved accumulated
tax losses upon change in the
ownership of the company, subject to
meeting the conditions of the Minister
36
 Corporate
Tax (cont.)

Tax Holidays

● 8 year tax holiday - Innovation Box

Regime
○ Available to newly set up
companies involved in
innovation-driven activities on
income derived from intellectual
property assets developed in
Mauritius.
○ Existing companies will benefit
from the tax holiday if the
intellectual property assets are
developed in Mauritius after 10
June 2019.
○ The income tax holiday is
available subject to satisfying
pre-defined substance
requirements.

● 8 year tax holiday to newly set-up

company developing a marina.

● 5 year tax holiday to companies setting

up an e-commerce platform in Mauritius
before 30 June 2025.

● 5 year tax holiday granted to a Peer-to-

Peer lending operator starting operation
before 31 December 2020.

● 4 year tax holiday granted on income

derived from bunkering of low sulphur
heavy fuel oil.

PwC | Budget Brief 2019 - 2020 37

Personal
Tax
Exemptions and reliefs
● Deduction for a child pursuing tertiary
studies extended to a maximum of 4
dependents.
● Relief of Rs10,000 for medical
insurance premium paid for fourth
dependent.
● Additional income tax exemption of
Rs50,000 granted to retired or disabled
persons having more than one
dependent.
Tax credit
● Tax credit of 5% given at time of filing of
return to employees earning net income
below Rs700,000 annually to reduce tax
rate to 10%.
● Employees with average cumulative
emoluments below Rs53,845 in a
month will be subject to 10% PAYE.
Solidarity levy
● Lump sum income received by a
person as pension, death gratuity or
compensation for death or injury will
be excluded from the computation of
Solidarity levy. This will be backdated
to take effect as from 1 July 2017.
● It was clarified that solidarity levy will
apply on an individual’s share of
dividend in a societe or succession.
PwC | Budget Brief 2019 - 2020
Negative income tax / Special allowance
● Household employers can pay
NPF/NSF of their household employees
either on a monthly basis or at the end
of the year but they must submit
quarterly statements to the MRA.
● All employers will be required to submit
their returns electronically and pay via
e-payment.
Peer-to-Peer lending
● Interest income received by an
individual from Peer-to-Peer lending will
be taxed at 3%.
● Any bad debt and fees payable to the
Peer-to-Peer operator will be deductible
from the taxable interest income.
● No tax deduction at source applicable
on Peer-to-Peer interest income.
Anti pollution campaign
● An individual will be able to deduct the
acquisition cost of a fast charger for
an electric car from his taxable
income.
38
Income Exemption
Threshold

Effective as from income year starting on 01 July 2019

Category From (Rs) To (Rs) Increase (Rs)

A. Individual with no dependent 305,000 310,000 5,000

B. Individual with one dependent 415,000 420,000 5,000

C. Individual with two dependents 480,000 500,000 20,000

D. Individual with three dependents 525,000 550,000 25,000

E. Individual with four or more dependents 555,000 600,000 45,000

F. Retired/disabled person with no dependent 355,000 360,000 5,000

G. Retired/disabled person with dependents 465,000 470,000 5,000

PwC | Budget Brief 2019 - 2020 39

Value Added
Tax

VAT Refund Scheme Removal of VAT

● Introduction of VAT refund scheme on ● VAT removed on specialised

accomodation costs for events of at compression garments used for medical
least 100 foreign attendees over 3 purposes.
nights
● VAT removed on vermicelli, toukmaria,
linseed, saggoo, appalam, mustard
● VAT refund scheme to
seed and sesame seed.
planters/breeders extended to:
○ Greenhouse cooling pads;
○ Greenhouse fans; Airline industry
○ Greenhouse growlights;
○ Agricultural dehumidifiers; ● VAT and customs duty exemption on
○ Hydroponic trough systems; printed materials by airlines bearing
○ Vertical grow towers; their insignia, publicity materials and
○ Dutch buckets/pots system; uniforms.
○ Netcups and pots;
○ Plant support clips;
○ Meshbags; Zero-rated supplies
○ Insect traps; ● Cooking gas for domestic use by
○ Aquaponics test kits; households in cylinders up to 12 kg will
○ Generators; be zero rated at a reduced selling price
○ Machinery for preparing animal of Rs210.
feed; and
○ Pregnancy diagnosis kits for cows. ● Transport fares of passengers by light
rail will be zero rated.
● VAT Refund Scheme on construction
of residential building, house or ● With retrospective effect as from 1
acquisition of apartment will be March 2019, bread classified as zero-
extended to 30 June 2025 with the rated.
following revised eligibility criteria:
○ Upper limit for cost of construction
of residence or purchase price of
apartment increased from Rs4m to
Rs5m
○ Household income threshold
increased from Rs2m to Rs3.5m

PwC | Budget Brief 2019 - 2020 40

 Value Added
Tax (cont.)

VAT Exemption Special Levy on Banks

● VAT exemption on construction of ● Income derived from Global Business

marinas. Companies exempt from levy.

● Levy increased from 4% to 4.5% of

operating income for a bank having
operating income over Rs1.2bn.

● A cap will be introduced on the increase

of levy payable.

● No foreign tax credit will be allowed

against the special levy.

PwC | Budget Brief 2019 - 2020 41

Other
Taxes
Freeport Regime
● Freeport operators or private freeport
developers engaged in the manufacture
of goods will be liable to tax at the rate
of 3% from sale of goods on local
market.
● Existing manufacturing companies with
a freeport certificate will have to meet
additional substance criterias:
○ Employ minimum of 5
employees
○ Incur annual expenditure
exceeding Rs3.5m
● Freeport operators liable to Corporate
Social Responsibility (“CSR”) on local
sales.
Tax on Winnings
● Legislations to be amended to reduce
possibility for a casino or gaming house
to split payment to winners in order to
avoid the 10% tax on winnings
exceeding Rs100,000.
● Reporting threshold on statement of
winnings to MRA to be lowered from
Rs100,000 to Rs50,000.
PwC | Budget Brief 2019 - 2020
Property Tax
● Transfer of a movable property between
spouses will be exempt.
● A descendant returning to an ascendant
a property donated by the latter is
exempted from payment of registration
dues.
● The above exemption will also apply to
the spouse of the descendant if the
donated property was jointly owned by
the spouses.
● Registration duty, land transfer tax and
tax on transfer of leasehold rights in
State land will not be leviable on the
transfer of immovable property between
a statutory body, a company where the
Government holds directly at least 90%
of its shareholding or a wholly owned
subsidiary of that company.
Customs Duty
● A producer or manufacturer engaged in
agriculture or agro-based industry, will
be exempted from customs duty on
packaging materials.
● No customs duty on importation of vans
to be used as school buses.
42
 Other
Taxes (cont.)

Excise Duty Excise Duty (Contd.)

Electric and Plug-in Hybrid Cars ● Duty exempted on purchase of

single/double space cabin vehicle by
● Rate of excise duty is being lowered as registered bee-keepers holding a
follows: minimum of 20 beehives.

Type of Motor Car Current New ● Taxi operators will benefit from duty-
free cars every 4 years instead of 5
Electric Car years.
Up to 180 kW 0% 0%
● 50% excise duty on non-fossil outboard
Above 180 kW 25% 15% motors will be removed.
Plug-in Hybrid Car
Up to 550 c.c. 0% 0% Registration Duty
551 - 1,000 c.c. 25% 10% ● Exemption for first time buyer on the
first Rs2.5m of the value of bare land
1,001 - 1,600 c.c. 25% 15% not exceeding 20 perches, to build a
1,601 - 2,000 c.c. 45% 30% house.

2,001 - 3,000 c.c. 70% 55% ● First time buyer of existing house or
apartment will be exempted of
Above 3,000 c.c. 70% 65%
registration duty on its first Rs5m.

Mogas and Gasoil ● No registration duty payable on a

secured housing loan for an amount not
● Rate of excise duty on mogas and exceeding Rs2.5m.
gasoil will be reduced. New prices
effective from 11 June 2019:

l
Item Current New
Mogas (per litre) Rs47 Rs44
Gasoil (per litre) Rs38 Rs35

PwC | Budget Brief 2019 - 2020 43

Tax
Administration

General Income Tax

Voluntary Disclosure of Income - Foreign Service Fee for Tax Residency Certificate
Assets (TRC)

● A scheme will be introduced to allow a ● Exemption from service fee payment

voluntary disclosure of previously for obtaining TRC by artists.
undeclared income held in a bank
account overseas or used to purchase Corporate Social Responsibility (CSR)
foreign assets. Assessment

● A person making a voluntary ● The MRA may raise an assessment

disclosure on or before 31 March 2020 on a company which has neither spent
will not be subject to penalties and the CSR fund as required by the law
interests and will be taxed at 15% on nor remitted same to the MRA.
the disclosed chargeable income.
Arm’s Length Transaction
Voluntary Disclosure of Income - SMEs

● No penalties and interests for Small
and Medium Enterprises (“SMEs”)
with turnover not exceeding Rs50m
willing to regularise any undeclared or
under-declared income.
● The arm’s length provision will be
amended to remove any doubt or
uncertainty about its application

Arrears Payment Scheme - SMEs

● Any tax arrears owed by SMEs as at

10 June 2019 will not be subject to
any penalties and interest if the tax is
paid on or before 31 March 2020.

Assessment Review Committee (ARC)

● If an aggrieved taxpayer has not

submitted the required statement of
case or other documents due to
reasonable cause, the ARC may
proceed with the hearing of the
appeal.

PwC | Budget Brief 2019 - 2020 44

 Tax
Administration (cont.)

Value Added Tax ● It was clarified that the management

● Compulsory registration for wholesale
dealers in liquor and alcoholic products.
● A VAT registered person may claim
● Services provided to a foreign company
which is outside Mauritius will continue
to be zero-rated to the extent that the
foreign company does not in turn supply
these same services to another local
company.
of insurance schemes is exempted
from VAT.
repayment of VAT paid on -
○ Goodwill on acquisition of a
business; and
○ The acquisition of intangible assets
such as software, patents or
franchise agreements.

● VAT exemption on payment of ● All VAT-registered persons will have

subscription fees will be extended to to file their VAT return and pay VAT
cover prescribed professional bodies. electronically as from 1 March 2020.

● Where there is a splitting of a business

entity into different entities to avoid
registration for VAT purposes, each
entity will be required to be compulsorily
registered for VAT.

● A VAT invoice issued to a non VAT

registered person in business should
include his name, business address and
the Business Registration Number.

PwC | Budget Brief 2019 - 2020 45

Immigration

Post-Study Work Visa Occupation Permit and Work & Residence

Permit
● Introduction of a “Post- Study Work
Visa” for International undergraduate
● The schedule under the Economic
students having studied in the fields of
Development Board Act for Occupation
ICT, Fintech, AI and Biotechnology.
Permit will be reviewed.
● The “Post Study Work Visa” will be valid
● The eligibility criteria will be clearly
for a period of 3 years after completion
defined and guidelines will be
of studies.
introduced for Occupation Permit.
Significant Employers Scheme (SES)
● The Non-Citizens (Employment
● Introduction of the Significant Restrictions) Act will be amended.
Employers Scheme by the Economic
● A step-by-step timeline will be
Development Board which will replace
introduced for the procedures to be
the Foreign Manpower Scheme.
completed for Work Permit applications.
● A foreign worker employed under this
scheme will obtain an entry visa of not
more than 3 months allowing them to
work while the Occupation Permit
application is under process.

Criteria to qualify for SES

● Business should advertise positions on

the employment portal of the ministry of
Labour and newspapers.

● Recruitment policy should favour

Mauritian workers.

● To support the re-skilling of workers the

business will commit half of a month’s
salary per year and per worker to the
workfare programme.

● The foreign worker must meet the

criteria under Work Permit and
Occupation Permit.

PwC | Budget Brief 2019 - 2020 46

 About PwC

6
Engineered for the future

In times of global change and transition, we are ready for tomorrow. With our move to the PwC
Centre and our investments in AI and Robotics, we have engineered the PwC Mauritius’ eco-
system to bring value to our clients, our people and society:

Driving Global Young

Innovation Acumen Leadership

100 158 30 yrs

Countries using Global
Payroll Portal developed Countries with a Average age of our
by PwC Mauritius PwC firm workforce

Sustainability Employer Diversity

of Choice

2019 70 12:10
Move to a new LEED New graduates Ratio of
certified building join us every year Women:Men

PwC | Budget Brief 2019 - 2020 4

 Your Contact Point

Anthony Leung Shing Dheerend Puholoo Feroz Hematally

Country Senior Partner & Tax Tax Partner Senior Manager
Leader
T +230 404 5079 T: +230 404 5013
T: +230 404 5071 E: d.puholoo@pwc.com E: feroz.hematally@pwc.com
E: anthony.leung.shing@pwc.com

Robert Coutet
Assurance Leader

T: +230 404 5138

E: robert.coutet@pwc.com

Jean-Pierre Young
Advisory Leader

T: +230 404 5028

E: jean-pierre.young@pwc.com

Anne-Sophie Jullienne
Managing Partner, PwC Legal (Mauritius) Ltd

T: +230 404 5483

E: anne-sophie.jullienne@pwclegal.mu

PwC | Budget Brief 2019 - 2020 4

PwC
PwC Centre​, Avenue de Telfair​, Telfair 80829​, Moka
Republic of Mauritius
Tel: +230 4045000

www.pwc.com/mu

Find out more on :

www

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice.
You should not act upon the information contained in this publication without obtaining specific professional advice. No
representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this
publication, and, to the extent permitted by law, PricewaterhouseCoopers Ltd, its members, employees and agents do not
accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to
act, in reliance on the information contained in this publication or for any decision based on it.

© 2019 PricewaterhouseCoopers Ltd. All rights reserved. In this document, “PwC” refers to Mauritius member firm, and may
sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further
details.