{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.text}}
The much awaited Finance (Miscellaneous Provisions) Act 2021 is out. Download our Tax and Regulatory summary of the announced measures. Click here
Tax Perspective
Reducing the tax burden: the next priority for the government
By Dheerend Puholoo, Tax Leader
The Pandemic, still in its full swing, is forcing us to think pragmatically to counter its immediate effects on our economy. Mauritius has been badly hit by the second wave and there was a lot of expectation from the second Budget of the Minister of Finance, Dr the Honourable Renganaden Padayachy, to provide that fresh air for Mauritius to take off in the wake of the impending opening of our frontiers.
While the themes of the Budget are “investment”, “shaping a new economic architecture" and “restoring confidence”, it barely comes out with innovative measures to bring that needed tonic. A huge relief though - there will be no major tax increases!
SMEs remain one of the main pillars of the economy, and we welcome the initiatives of the government to support them in this precarious environment. Among others, the refund of the salary compensation, amnesty on trade fees, grants and interest free loans, etc. will be helpful. The extension of the Tax Arrears Settlement Scheme (TASS) for SMEs up to 31 December 2021 remains an attractive measure. Hopefully, the Mauritius Revenue Authority (MRA) will support taxpayers to take the maximum benefits from such incentives. There is an outcry among some taxpayers that the MRA comes with unwarranted tax bills that could be a cause for hardship.
The MRA will now have wider powers to raise time barred assessments in cases of tax fraud. This is common in many developed countries. While we support the initiative of the government to track tax dodgers, there should be a clear framework for the MRA to exercise such powers. Wide powers come with responsibilities, and we hope that the MRA uses those powers diligently and judiciously.
The tax reforms under the BEPS project prompted us to make major tax reforms in 2018, and this to some extent affected the industry. However, the inclusion of Mauritius on the FATF list and EU blacklist came as an additional blow. It is a matter of urgency that Mauritius should be cleared from those lists, and the different measures announced in the Budget provide testimony of our intention to be a compliant jurisdiction. However, the question remains whether we should not be more proactive on such sensitive matters. The next challenge to address is the “Global Minimum Tax'' that is looming ahead!
A fair measure is the amendment of the different tax laws to cater for the second lockdown, especially when it relates to the tax obligations of taxpayers. We saw the extension of the TASS until 31 December 2021 only for SMEs. In the absence of the same privilege being available to all taxpayers, we at least hope that the existing TASS is extended.
In my view, in its quest to boost investment, the government has been wise not to increase taxation. It is a fact that the tax rate in Mauritius is substantially more than 15% for many taxpayers. In the uncertain environment that we are living in, we can only hope that we work towards a lower tax burden for the population.
It is a fact that the tax rate in Mauritius is substantially more than 15% for many taxpayers.
{{filterContent.facetedTitle}}
{{contentList.loadingText}}
{{contentList.loadingText}}
Follow PwC Mauritius
