MAURITIUS 2018/19 BUDGET SPEECH
The Prime Minister and Minister of Finance and Economic Development, Hon. Pravind K Jugnauth presented the National Budget on 14th June 2018.
The Budget identified seven key action areas which include: innovation and accelerating the adoption of digitisation, creating a strategic and modern infrastructure, focusing on sustainable development and creating an inclusive and caring society.
Key Highlights of the Budget Speech:
- The GDP growth rate for the year 2017/18, would be 3.2 %
- GDP is expected to grow by 4.1 % in fiscal year 2018/19 compared to 3.9 % in 2017/18
- The inflation rate, estimated at 4.3 % for fiscal year 2017/18, is forecasted to fall to around 3.5 % in 2018/19
- Revision to the taxation of Category 1 Global Business Licence (GBC 1) companies. The budget proposes a new harmonised fiscal regime for domestic and Global Business companies. The Deemed Foreign Tax Credit regime currently available to companies holding a GBC 1 Licence will be abolished from 31 December 2018. Consequently, GBC 1 companies will cease to benefit from an automatic effective tax rate of 3% on their foreign sourced income.
- On the productivity side, a Work@Home scheme with tax incentives for employers is being introduced. increased by MUR 5,000, effective as from 1st July 2018.
- A double deduction for tax will be granted on the wage and salary costs of employees operating under the Scheme for the first two years of operation.
- Employers under the Scheme will be granted an annual tax credit of 5% for the first three years in respect of the investment made in the required IT system.
Income Tax Changes:
- Income exemption threshold of all employees are increased by MUR 5,000, effective as from 1st July 2018
- An individual having an annual net income of up to Rs 650,000, will be taxed at the rate of 10% instead of 15%.
- The exemption threshold on the lump sum received as severance allowance, pension or retiring allowance will be raised from Rs 2 million to Rs 2.5 million
- The Insurance Industry Compensation Fund will be exempted from income tax
- A retired person will now be eligible to the enhanced income exemption threshold granted to retirees even if he derives emoluments provided that such income does not exceed Rs 50,000 in an income year
- The deduction in respect of a dependent child pursuing tertiary education abroad has been increased from MUR135,000 to MUR200,000. Similarly, if the dependent is pursuing tertiary education locally, the relief has been raised from MUR135,000 to MUR 175,000
TANZANIA 2018/19 BUDGET SPEECH
Tanzania’s Minister for Finance and Planning, Hon. Dr. Philip I. Mpango has presented to the National assembly the Estimates of Government Revenue and Expenditure (the Budget) for 2018/19.
The budget aims to expand the tax base, formalize the informal sector and foster a conducive investment environment through simplification of the tax collection process.
Key Highlights of the Budget Speech:
- Performance of the economy in the past five years (2012-2016) remained buoyant with real GDP growing at an annual average rate of 6.7%.
- The Tanzanian economy grew by 7%, marginally missing the set target of 7.2% mainly on account of underperformance in the agriculture sector, which accounts for 28.9% of the GDP.
- To improve tax compliance, the Minister has proposed to amend the Act by giving 100% amnesty on interest and penalties for six months starting from 1 July 2018 through 31 December 2018.
- The Minister has proposed to reduce the corporate income tax rate from 30% to 20% for new investors in the pharmaceutical and leather industries for five years from 2018/19 to 2022/23.
- In order to increase and strengthen domestic resources mobilization, revenue policies for the year 2018/19 will focus on widening the tax base, strengthen management of existing sources especially by intensifying the use of electronic collection systems and other administrative measures.
- In widening the tax base, there are two main measures that the Government will undertake, namely formalization of the informal sector and improve investment environment in order to foster new sources of revenue from such investments.
- Introduction of a “Treasury Single Account” which will be used for collection and payment of government funds.
- Occupational Safety and Health Administration (OSHA) fees and levies – The following will be abolished in order to improve general business environment:
Feesthe and levies imposed on application for working places
Fines related to fire and rescue equipment
OSHA compliance licence of Tshs 500,000
OSHA consultancy fees of Tshs 450,000
- No changes to the taxation of Individual Income or Employment Income.
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