2023/2024 BUDGET SPEECH
It is important that employers note the following:

Budget speech and tax changes for the 2023-2024 year of assessment

The Minister of Finance, Economic Planning and Development presented the 2023/2024 National Budget on Friday, 2 June 2023.

The Minister has launched a number of economic policies to maintain economic recovery through import substitution, diversification and revitalising exports. The abolition of the solidarity levy, the installation of a new progressive tax system, the increase in the minimum wage, and other significant social measures have all been included in the new tax budget.

The main tax measures announced in the budget speech include:

·        The exemption of Rs 325,000 granted to a taxpayer in respect of self has been replaced by a tax rate of 0%, applicable on the first Rs 390,000 of chargeable income.

·        An individual with no dependents, having a net income of up to Rs 30,000 monthly, as compared to Rs 25,000 under the present system, will not pay any income tax.

·        A 200% tax deduction for newly employed women or those who have been unemployed for at least a year under the Prime à L’Emploi Scheme.

·        A 300% tax deduction for the employment of disabled individuals under the Prime à L’Emploi Scheme.

The annex to the budget, which outlines the primary measures to be included in the Finance (Miscellaneous Provisions) Bill 2023, also covers a number of other initiatives. The following are some of the key measures:

·        The waiver of all outstanding debts of the COVID-19 levy as at 20 January 2023, including penalties and interest.

·        Monthly financial assistance for the payment of salary compensation for the period January 2023 to June 2024. This assistance will be payable to an SME and an export oriented enterprise during the period  January 2023 to June 2024, including a double payment in December 2023:

·        Rs 250 or Rs 500 per eligible employee of SMEs, including expatriate employees, depending on the profitability of the enterprise;

·        Rs 300 per eligible employee of an export oriented enterprise, including expatriate employees; and

·        Rs 500 per eligible employee of a large public bus operator, including expatriate employees.

·        The Tax Arrears Settlement Scheme (TASS) will be reintroduced. The scheme provides for full waiver of penalties and interest where tax arrears, outstanding under the Income Tax Act, the Value Added Tax Act and the Gambling Regulatory Authority Act, are paid in full by 31 March 2024 and provided the taxpayer registers under the scheme by 31 December 2023.

To view the budget speech, follow the link, and to view the annex to the budget, click here.