Mauritian Business Submits Budget Wish List

by Lorys Charalambous, Tax-News.com, Cyprus

14 October 2011

Ahead of the forthcoming 2012 budget presentation, the Mauritius Employers’ Federation (MEF) has submitted a number of fiscal proposals to Mauritian Finance Minister Xavier-Luc Duval, aimed at addressing a number of domestic constraints on businesses in Mauritius.

Alluding to the fact that the country’s 2012 budget is being presented against a backdrop of a worsening global economic climate, and underscoring the need for a prompt and coherent policy response by government to pave the way for the economy to move onto a higher growth path in the medium-term, the federation proposed that the 2012 budget gives due consideration to business facilitation, to employment, to small- and medium-sized enterprises (SMEs), to existing labour laws, to training and to corporate social responsibility.

Underlining the fact that a business friendly environment is a necessary precondition for companies to invest and to create jobs, the federation explained that Mauritian enterprises are currently faced with high legal and regulatory compliance costs.

It stated in its memorandum that: “Besides the different types of taxes, there is a wide array of levies, charges, fees and contributions that businesses have to pay with regards to permits and licences and in complying with the administrative requirements of a number of regulations”.

“These tend to add a significant amount to both the direct and indirect costs of doing business and have a bearing on efficiency, productivity and competitiveness”, it said.

According to the MEF, the government needs to accelerate reforms for improving the investment climate and reducing the costs of doing business in Mauritius. It therefore advocated in its memorandum that a joint public-private sector group be set up with a view to simplifying cumbersome bureaucratic processes and eliminating red tape that undermines competitiveness.

In addition, it recommended that the range of payments affected by enterprises be reassessed through consultation.

Other key proposals outlined by the federation included the recommendation that the 1% levy contribution by employers going to the Workfare Programme (which aims to provide on-the-job training to the unemployed and to individuals affected by the restructuring of the economy) be either eliminated or suspended, and that the training levy is reduced from 1% to 0.5%.

The Mauritian finance minister is due to present the budget on November 4.

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