Mauritius Unveils 2010 Budget

by Lorys Charalambous, Tax-News.com, Cyprus

19 November 2009

Mauritian Finance Minister Rama Sithanen has recently unveiled details of the 2010 budget, centered around three main priorities: shaping recovery to accelerate job creation; consolidating social progress to embed inclusive growth; and sustaining 'Green Mauritius' to mitigate the impact of climate change.

Despite clear signs of a return to growth for Mauritius, with the Central Statistical Office predicting a growth rate of around 2.8% for 2009 and 4.3% for 2010, and although the global economy is showing signs of recovery sooner than previously anticipated, the government has decided nevertheless to maintain additional stimulus measures, announced earlier this year, until December 2010 as planned.

As a result of this decision, the government is pledging to:

  • Continue its direct support to small- and medium-sized enterprises, and to large enterprises facing temporary difficulties due to the crisis, in order to protect jobs and businesses.
  • Maintain its commitment to frontload its public infrastructure plan to boost construction activities and to create jobs.
  • Accelerate private sector investment.
  • Maintain emergency tax suspensions in the tourism, construction, and real estate industries until December 2010, in order to stimulate growth and to protect jobs.
  • Retain, until December 2010, the incentive package for increasing tourism in Rodrigues.
  • Sustain a fiscal and monetary policy designed to support investment, growth and job creation.

Further key tax initiatives contained in the government’s 2010 budget include plans to:

  • Maintain the value-added tax rate at its current level;
  • Abolish the customs duty currently levied on rice milk, oats milk, and almond milk;
  • Allow companies listed on the stock exchange with minority foreign shareholding to acquire immovable property without prior approval;
  • Subject payment of royalties to non-residents to a withholding tax of 15% instead of 10% as final payment;
  • Align the fiscal year to the calendar year. Therefore the latest date for submission of tax returns will be moved to two working days before the end of the year, rather than December 31;
  • Simplify the procedure for registration and for the renewal of charges at the Registrar General’s Department in order to improve the business climate in Mauritius; and
  • Increase the betting tax levied on football matches from 2% to 8%, in line with the betting tax currently levied on horse racing.

By maintaining the budget deficit and public debt on a “responsible and sustainable path,” while at the same time investing in shaping recovery, the Mauritian government is expecting the economy to return to its growth path of 5.5% and higher by 2011.

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