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Sectors Review
Budget 2021 - 2022 measures by sector
By our Industry Leaders and PartnersWe reviewed the main measures announced in the Budget 2021 - 2022 across some key sectors of the Mauritian economy. Click on the respective sector to read more.
Financial Services
A number of amendments have been proposed to our regulations in order to reinforce the credibility of Mauritius as an international financial centre and to move the country out of the FATF grey list. It has been over a year since the country is trying to get out of this list.
We hope that those measures will be sufficient and that they will be effectively implemented on a timely manner. The recruitment of new personnel to strengthen the institution’s compliance capacity and the launching of the one-year training programme on AML go in the right direction. But will this be sufficient and effective in the short term, given the urgency?
The sector has been further diversified with the introduction of a few new products. These will add on to the list of new products introduced in the previous budgets but which are taking long to contribute to the growth of the sector.
Key Financial Services measures announced in Budget 2021 - 2022
Digitisation of the sector
Roll out of a Central Bank Digital Currency on a pilot basis
Introduction of a QR code at national level to facilitate digital payments
Launching of the FSC One platform as an online licensing portal as from 01 July 2021
Reinforcement of the regulatory framework to accelerate the completion of the Financial Action Task Force (FATF) action plan for an early exit from the grey list
Extension from 5 to 10 years of the tax holiday for Family Offices and Fund and Asset Managers
Hospitality, Manufacturing & SME
The important marketing budget for our destination along with the bold measures to make our destination more sustainable will be welcome by operators. The extension of the GWAS to September is not likely to be enough as forecasted occupancy levels are expected to be insufficient to break even.
Some interesting measures to boost Made in Moris should further help reduce our dependence on imports. With the devaluation of the Rs and the tax incentives provided, the sector is encouragingly looking for diversification.
The measures for SMEs seem very timid given the importance they have in our economy and lack the boost we were expecting.
Key Hospitality, Manufacturing, and SMEs measures announced in Budget 2021 - 2022
Reopening of borders in phases as from 15 July with full opening expected by 01 October
Increasing the maximum investment through licensed crowdfunding platforms from Rs200,000 to Rs1m for SMEs.
Tax benefits and capital assistance in promoting the pharmaceutical industry
Rs5bn allocated for the creation of a Modernisation and Transformation Fund to re-ignite industrial development
Agri-Business & Real-Estate
The biomass remuneration to all planters and producers, estimated at c.Rs900m, will provide a shot in the arm to the beleaguered sugar industry and the warehouse for storage of bagged sugar is also welcomed. Whilst these incentives for the agro industry are a marked departure from last year’s more timid measures, there are no notable incentives to boost the blue economy.
The Minister has tried to be innovative with his measures for the real estate sector reeling from the pandemic. The part refund of the cost of a property and the cover of an individual’s mortgage could well prove a boon for the industry but the latter does raise a question of moral hazard.
The land transfer tax and registration duty exemption for new companies operating in certain sectors will benefit some but these will not, on their own, encourage investment in these sectors.
Key Real Estate and Agri-Business measures announced in Budget 2021 - 2022
Remuneration of Rs3,300 per tonne of sugar to all planters and producers for bagasse, equivalent to c.Rs900m per annum based on last year’s sugar production tonnage
Setup of a storage facility of 150,000 tons for bagged sugar at Riche Terre
Rs2bn earmarked to support the purchase of residential land and property as well as the construction of housing units by individuals including a maximum refund of Rs500,000 to a Mauritian citizen
Exemption from payment of Registration Duty and Land Transfer Tax for the purchase of immovable property for business purposes for new companies
Public Sector
A healthy nation, is indeed, a wealthy nation. The social measures proposed, if implemented, will lead us back to that aspiration. With investment and funding being directed towards upgrading water supply, drainage systems, education, hospital, law and order: the livelihoods of the population will be safeguarded and improved, especially in view of the pandemic effects. That reconciles with the notion of a Caring Government. However, many Governments have fallen short in matching Aspiration with actual Outcomes.
For that Care to be felt, it is essential that these announced measures are implemented without burdening future generations. The gap between Aspiration and Outcome could be addressed through the proposed setting up of the Implementation and Monitoring Agency. For this Agency to work, Collective Responsibility together with an Accountability Framework is required in order to bring the lasting change that our nation aspires to. To achieve the envisioned 3 Rs (Recovery, Revival, Resilience), it’s time for more action and less talk.
Key Government and Public Sector measures announced in Budget 2021 - 2022
Significant investment in public sector in an effort to spur economic growth
Rs22bn earmarked for public infrastructure development, including investment in improving water supply
Focused on green energy and sustainability
Information & Communications Technology (ICT)
The measures announced in the budget are short of our expectations, with little initiatives that would boost the ICT sector or transform Mauritius so that it stays relevant in the future.
The upskilling of our workforce should have been a priority, with a fundamental rethink of the country’s education curriculum. The deployment of an eLearning Management System will not be useful if the courses are not relevant.
The government had the opportunity to further digitise the public sector, reduce costs and improve efficiency, thus provide quality service to its citizens 24/7.
The intent to pilot a Central Bank digital currency is in the right direction, as it lays the foundation to digitising our payments ecosystem, accelerating the country’s adoption of e-currency, reducing money laundering and lowering the cost of paper money.
The implementation of more digital platforms to provide services to citizens and investors is welcome, as long as they are providing the service and are not just static websites.
A number of measures announced in last year’s budget are still not implemented, and unless there is better monitoring of the implementation progress, these will remain a list of announcements.
Key Information and Communication Technology measures announced in Budget 2021 - 2022
Public Sector Digitisation Developing a more digitally accessible public sector
Digital Business Facilities Implementing digital platforms to serve citizens and investors
Embracing FinTech Adopting of digital currencies and promotion of electronic transactions
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Contact us
Anthony Leung Shing, ACA, CTA
EMA Deputy Regional Senior Partner, Country Senior Partner, PwC Mauritius
Tel: +230 404 5071
Jean-Pierre Young, ACA, CIA
Partner, Consulting & Risk Services, PwC Mauritius
Tel: +230 404 5028
Olivier Rey
EMA Clients and Markets Leader, Assurance Partner, PwC Mauritius
Tel: +230 404 5145
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