The creation of jobs, promotion of employment and return to growth by securing the transition to a globally competitive economy were the main priorities of the 2006-2007 Mauritius government budget, which was presented on June 9 by the Deputy Prime Minister and Minister of Finance and Economic Development, Mr Rama Sithanen.
The budget comprises 40 major reform measures aimed at opening the economy to foreign investors and attracting foreign talent by simplifying business procedures. The government expects these reforms to improve the country's standing as an investment destination by attracting foreign investors, knowledge-based industries and technology to develop new economic pillars and stimulate job creation.
Other important measures include a major restructuring of Income Tax, the introduction of a National Residential Property Tax and the gradual raising of retirement age from 60 at present to 65 in 2018. Mr Sithanen also underscored the need to address the fundamental weaknesses in tax and expenditure policies, in fiscal administration and expenditure procedures and in debt management.
In a bid to open up the economy, the government has also proposed to proceed with an Economic Empowerment Programme with a project value of R5 billion (US$161.6 million). A sum of R750 million has been allocated for FY 2006-2007 to commence the programme.
In the budget Estimates for 2006/2007, total tax revenue will amount to almost Rs 38.6 billion, which as a ratio to GDP, will remain at around 17.9 per cent. Total derived revenue, including grants, will amount to Rs 43.1 billion, representing 20 per cent of GDP. Current expenditure will amount to Rs 44.1 billion that is 20.5 per cent of GDP.
Capital expenditure and net lending will amount to Rs 7.5 billion, representing about 3.5 per cent of GDP. The overall budget deficit is estimated to be around Rs 8.6 billion, that is around 4 per cent of GDP.
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