News FlashesJune 13, 2022

CRS News Flash 10 June 2022 – MAURITIUS – 2022-2023 Budget Statement and Tax changes

JUNE 2022 – MAURITIUS
2022/2023 BUDGET SPEECH
It is important that employers note the following:

Mauritius 2022/2023 Budget speech and tax changes
On Tuesday, 7 June 2022 the Minister of Finance, Economic Planning and Development presented the 2022/2023 National Budget.

The Budget aims to set the foundation for a resurgence of the economy to pre-pandemic levels while continuing to show solidarity to the people of Mauritius to mitigate the effects of the increase in cost of living as a result of the ongoing war between Russia and Ukraine.

Economic highlights:

·        GDP growth for the 2022/23 financial year is expected to be 8.5%.

·        A budget deficit of 4% is expected for 2022/2023.

·        Public debt is expected to fall below 80% of GDP.

·        Total expenditure will amount to Rs 172.9 billion while revenue will be of Rs 150 billion.

Tax administration measures:

·        Reintroduction of the Tax Arrears Settlement Scheme (TASS), whereby a full waiver of penalties and interest will be given, provided that all tax has been settled by 31 March 2023 and provided that the taxpayer registers him/herself under the Scheme by 31 December 2022.

·        Increase of the rate of tax deduction at source (TDS) from 3% to 5% on services provided by professionals and from 5% to 7.5% on rent paid to a resident.

·        Introduction of TDS at 3% on consultancy fees.

·        The Income Tax Act will be amended to allow Mauritius to enter into international  arrangements for alternative dispute resolution, with a view to resolving cross-border tax  disputes and implementing the internationally agreed standards to prevent base erosion and profit shifting.

Income tax measures:

·        Introduction of a domestic minimum top-up tax of 15% on resident companies in Mauritius forming part of multinational enterprise groups having a global annual revenue of at least EUR 750 million.

As from July 2022, an individual earning up to Rs 700,000 will be taxed at 10%, and those earning between Rs 700,000 to Rs 975,000 will be taxed at 12.5%.

·        The allowable deduction/exemption on the following items has been increased:

·        In respect of a dependent child pursuing tertiary studies from Rs 225,000 to Rs 500,000

·        Medical insurance allowance increases by Rs 5,000

·        Contribution to personal pension schemes increases by Rs 20,000

·        Donations to charitable institutions increase by Rs 20,000

·        Maximum allowance deduction for petrol or traveling allowance increases to Rs 20,000

·        Additional deductions on the amount incurred to purchase manufactured products from a small enterprise by a large manufacturer increase to 25%.

 

To view the budget speech, follow the link.

 

 

Contact our legislation team at info@crs.co.za if you require any additional information. 

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