Budget Measures Explanatory Notes Main Provisions To Be


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BUDGET MEASURES EXPLANATORY NOTES MAIN PROVISIONS TO BE INCLUDED IN –
THE FINANCE (MISCELLANEOUS PROVISIONS) BILL 2021

Contents
Part A – Taxation and Public Finance A.1. Income Tax...................................................................................1 A.2. Property Tax ................................................................................. 6 A.3. Home Ownership Refund Scheme ............................................... 8 A.4. Lease of State Lands ................................................................... 8 A.5. Business Facilitation.....................................................................9 A.6. Training Levy under the Human Resource Development Act .................................................................................................... 11 A.7. COVID 19 Confinement Period ..................................................11 A.8. Levy on Mogas and Gas Oil .......................................................12 A.9. Excise Duty.................................................................................12 A.10. Customs Duty .............................................................................15 A.11. Value Added Tax ........................................................................16 A.12. Duty Free Shops and Deferred Duty and Tax Scheme (DDTS) Shops ......................................................................................... 17 A.13. Passenger Fee and Passenger Solidarity Fee...........................17 A.14. Tax Administration......................................................................18 A.15. Public Financial Management ....................................................26
Part B – Other Budget Measures B.1. Accelerating Project Delivery in the Public Sector .....................29 B.2. Reviewing the Grading Structure and Grade Ceilings for Contractors ................................................................................. 33 B.3. Promoting Renewable Energy and Energy Efficiency................33 B.4. Managing Electronic and Electrical Wastes ...............................35 B.5. Enhancing our Banking and Financial Services Sectors............35 B.6. Promoting the Mauritius International Financial Centre .............36 B.7. Business Facilitation...................................................................37 B.8. Expediting Access to Public Utilities...........................................38

B.9. Reforming the Judiciary..............................................................38 B.10. New Incentives Framework ........................................................39 B.11. Extending the Export Credit Insurance Scheme ........................40 B.12. Setting up a Business Regulatory Review Council ....................41 B.13. Facilitating Trade ........................................................................41 B.14. Occupation Permit ......................................................................42 B.15. Permanent Residence Permit ....................................................45 B.16. Work Permit................................................................................46 B.17. Extending the I-Council Project ..................................................46 B.18. Optimizing Water Conservation and Usage ...............................47 B.19. Developing Marine Biotechnology..............................................47 B.20. Alleviating hardships of the Sugar Cane Planting Community
.................................................................................................... 47 B.21. Additional Support to Non-Sugar Planters .................................48 B.22. Protecting our Local Artists ........................................................48 B.23. Sustaining Car Operators in the Tourism Sector........................48 Part C – Other Legislations C.1. Asset Recovery Act ....................................................................49 C.2. Bank of Mauritius Act .................................................................50 C.3. Banking Act ................................................................................51 C.4. Borrower Protection Act .............................................................52 C.5. Business Registration Act ..........................................................53 C.6. Civil Service Family Protection Scheme Act ..............................53 C.7. Civil Status Act ...........................................................................53 C.8. Companies Act ...........................................................................54 C.9. Co-operatives Act .......................................................................56 C.10. Courts Act ................................................................................... 56 C.11. Dangerous Chemicals Control Act .............................................57

C.12. Dangerous Drugs Act .................................................................57 C.13. Economic Development Board Act.............................................58 C.14. Environment Protection Act ........................................................59 C.15. Financial Intelligence and Anti-Money Laundering Act ..............59 C.16. Financial Reporting Act ..............................................................61 C.17. Financial Services Act ................................................................61 C.18. Fisheries and Marine Resources Act .........................................63 C.19. Fishermen Investment Trust Act ................................................63 C.20. Forests and Reserves Act ..........................................................63 C.21. Foundations Act..........................................................................64 C.22. Freeport Act ................................................................................ 65 C.23. Gambling Regulatory Authority Act ............................................65 C.24. Human Resource Development Act ...........................................69 C.25. Immigration Act...........................................................................69 C.26. Income Tax Act...........................................................................69 C.27. Information and Communication Technologies Act....................70 C.28. Insolvency Act ............................................................................70 C.29. Insurance Act..............................................................................71 C.30. Land Drainage Authority Act ......................................................72 C.31. Limited Liability Partnerships Act ...............................................72 C.32. Limited Partnerships Act ............................................................72 C.33. Local Government Act ................................................................72 C.34. Mauritius Agricultural Marketing Act...........................................72 C.35. Mauritius Institute of Training and Development Act..................73 C.36. Mauritius Qualifications Authority Act.........................................73 C.37. Mauritius Research and Innovation Council Act.........................73 C.38. Mauritius Revenue Authority Act ................................................74 C.39. Merchant Shipping Act ...............................................................74

C.40. Morcellement Act........................................................................74 C.41. National Payment Systems Act ..................................................74 C.42. Non-Citizens (Employment Restriction) Act ...............................75 C.43. Non-Citizens (Property Restriction) Act......................................75 C.44. Ombudsperson for Financial Services Act .................................76 C.45. Pensions Act...............................................................................77 C.46. Pharmacy Act .............................................................................77 C.47. Prevention of Corruption Act ......................................................77 C.48. Prevention of Terrorism Act........................................................77 C.49. Private Pension Schemes Act ....................................................78 C.50. Protected Cell Companies Act ...................................................78 C.51. Public Collections Act .................................................................78 C.52. Real Estate Agent Authority Act .................................................79 C.53. Reform Institutions Act ...............................................................79 C.54. Registration of Associations Act.................................................79 C.55. Rivers and Canals Act ................................................................80 C.56. Road Development Authority Act ...............................................80 C.57. Roads Act ................................................................................... 80 C.58. Rose Belle Sugar Estate Board Act ...........................................81 C.59. Statutory Bodies Pension Funds Act..........................................81 C.60. Sugar Industry Pension Fund Act...............................................81 C.61. Sugar Insurance Fund Act..........................................................81 C.62. United Nations (Financial Prohibitions, Arms Embargo and Travel
Ban) Sanctions Act .....................................................................81 C.63. Utility Regulatory Authority Act ...................................................82 C.64. Workers’ Rights Act ....................................................................82 C.65. Miscellaneous.............................................................................84

Part A – Taxation and Public Finance
A.1. Income Tax
Self-Employed Assistance Scheme
In order for a self-employed individual to benefit from the Self-Employed Assistance Scheme, he or she should be paying the Contribution Sociale Généralisée (CSG) as from 1 July 2021.
Moreover, the self-employed individual will also be required to submit an income tax return. In this context, the Mauritius Revenue Authority (MRA) will devise a simple return whereby a self-employed person whose income does not exceed the basic income exemption threshold will be able to declare only an estimate of income derived during the year.
Assistance to Small and Medium Enterprises (SMEs) for Salary Compensation
The Income Tax Act will be amended to cater for the decision of Government to refund to an SME the salary compensation paid to its employees, that is a maximum of Rs 375 per employee monthly, for the period January to June 2021. The amendment will be effective as from1 January 2021.
An SME which is an export-oriented enterprise will be refunded a maximum of Rs 235 per employee monthly.
The maximum salary compensation of Rs 375 will be extended for the period 1 July 2021 to 30 June 2022.
This assistance is not payable to an SME for a particular month if it has benefitted from the Wage Assistance Scheme in that month.
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Deduction for Dependent who is a Bedridden Next of Kin
Since last year, a taxpayer is allowed to claim as dependent a bedridden next of kin who is in his care.
It will be clarified that any financial assistance provided to the bedridden person under the National Pensions Act such as basic retirement pension, basic invalidity pension, carer’s allowance and contributory invalidity pension will not be taken into account in determining his eligibility as a dependent.
Contributions to COVID-19 Vaccination Programme Fund
Individuals and enterprises contributing to the COVID-19 Vaccination Programme Fund will be allowed to deduct the amount contributed from their taxable income at the time of submission of their income tax return.
An individual may carry forward any unrelieved deduction in an income year for a maximum period of two successive income years.
Double Deduction of Expenditure Incurred on Research & Development (R&D)
In order to encourage our local companies to export on the African market, a manufacturing company will be entitled to a double tax deduction in respect of expenditure incurred for market research and product development targeting the African market.
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Premium Visa A Premium Visa Scheme has been introduced with the objective to encourage eligible foreigners to come for long stay in Mauritius for a period of at least one year with the possibility of renewal. To make this Scheme attractive and also to avoid any administrative hurdles, a holder of a Premium Visa, spending 183 days or more in the Republic of Mauritius, will be subject to income tax as follows – (i) the Mauritian-sourced income of a Premium Visa Holder
(e.g. emoluments for work performed remotely in Mauritius) will be taxed on a remittance basis, that is in the same manner as foreign-sourced income; (ii) money spent in Mauritius through the use of foreign credit or debit cards by the holder of a Premium Visa will not be deemed to have been remitted to Mauritius; and (iii) income brought and deposited in a bank account in Mauritius will be liable to tax except if a declaration is made by the holder of a Premium Visa that the required tax has been paid thereon in his country of origin or residence. These amendments will be backdated to take effect as from 1 November 2020.
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Tax Holiday
Asset/Fund Manager
A 5-year tax holiday is granted on emoluments of an asset manager, a fund manager or asset and fund manager who manages an asset base of not less than USD 100 million and who has been issued with a certificate on or after 1 September 2016.
Holders of a certificate issued on or after 1 September 2016 will be exempted from tax on their emoluments for an additional 5 years while new certificate holders will be eligible to a tax holiday of 10 years.
In addition, the threshold of USD 100 million in respect of asset base being managed by an Asset/Fund Manager will be reduced to USD 50 million.
Foundations and Trusts
The Income Tax Act will be amended to ensure that foundations and trusts benefitting from a preferential tax regime comply with the OECD standards, including substantial activity requirements.
Tax payment under Advance Payment System
The method for computing tax liability of companies under the Advance Payment System will be amended to cater for companies which are subject to corporate tax at a lower rate than the 15% standard tax rate.
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Tax payment under Current Payment System
The method for computing tax liability of a self-employed individual under the Current Payment System will be amended to cater for those persons who are subject to tax at the lower rate of 10%.
Investment Tax Credit
It will be clarified that any unrelieved investment tax credit of a manufacturing company may be carried forward for 10 years.
Small Enterprise paying Presumptive Tax
A small enterprise is eligible, at its option, to pay a presumptive tax of 1% of its turnover and is not required to declare its chargeable income. It will, therefore, be clarified that such an enterprise is exempted from Corporate Social Responsibility (CSR) obligation.
Deferral of tax payment
The Income Tax Act will be amended to ratify the decision for the –
(i) income tax liability of companies under the Advance Payment System (APS) due in November 2020 up to May 2021, to be deferred until 30 June 2021; and
(ii) advance payment of personal income tax by self-employed individuals under the Current Payment System (CPS) in the income year 2020/2021 to be deferred up to October 2021, that is at time of submission of their income tax return.
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Budget Measures Explanatory Notes Main Provisions To Be