The Budget for 2022-23 was presented under the theme “with the people, for the people” and fittingly was a social budget against a backdrop of rising inflation.
The Finance Minister announced amendments to the national legislative framework to strengthen its adherence to international standards, spurred by the removal of Mauritius from the various FATF, EU and UK list in recent months.
When it comes to keeping pace with the evolving international tax landscape, a domestic minimum top-up tax will be introduced for MNEs with global annual revenue of Euro 750 million. The MRA will also be empowered to recover foreign taxes and provide assistance to foreign tax authorities.
To further align Mauritius with international tax norms, changes to income tax rules will allow Mauritius to enter into international arrangements for alternative dispute resolution with a view to resolving cross border tax disputes, and implementing Base Erosion and Profit Shifting (BEPS) standards.
On the digital economy, the Minister will also have the power to make regulations to cover internationally agreed policies to address tax challenges. Closer to home, the Tax Arrears Settlement Scheme (TASS) will be re-introduced, providing for a full waiver of interest and penalties where tax arrears are paid in full by 31 March 2023.
With the financial services industry having demonstrated strong resilience with a growth rate of 4.2% last year, a number of new initiatives were announced. The Bank of Mauritius will launch a Renminbi Clearing Centre together with the Bank of China, and will collaborate with the National Payments Corporation of India for the issuance of ‘RuPay’ cards and Indian QR Code in Mauritius. The FSC will revamp its framework to enable re-Insurance companies to set up operations in Mauritius, among other announcements.
To attract High Net Worth Individuals and their families, the current requirement will be reviewed to a minimum portfolio of USD 5 million per management family office. There was also a nod to sustainable finance, with an Environmental, Social and Corporate Governance (ESG) framework to be developed and an inaugural Sustainable Bond to be issued to finance the national sustainability roadmap.
As a further commitment towards the ease of doing business, the Minister boldly announced that “it will henceforth not cost a single rupee to start a business and incorporate a company in Mauritius” and, added that “the Bank of Mauritius will ensure that a bank account can be opened within one week, be it for an individual or a business”.
As the Mauritian economy slowly recovers, the Budget’s focus was on social measures to support the people at the bottom of the pyramid while seeking to attract investors who will bring in capital, expertise and talent to write the next chapter of the country’s history.