The main measures of the Finance Bill 2023 in Mauritius

On Tuesday, July 18, the Mauritian Parliament passed the Finance Bill 2023 to formalize the provisions presented in the 2023-2024 budget. Here are some of the main measures adopted.

Real estate

In 2022, Mauritius introduced an additional registration tax of 10% on the value of the property (excluding VAT) for foreigners acquiring property outside existing real estate schemes in Mauritius, where the value of the property was at least 350,000 USD. The amendment proposed in the Finance Bill is to apply this additional tax only where the value of the property is USD 500,000 or more.

The Finance Bill also suggests extending the conditions for obtaining a Mauritian residence permit for foreigners. From now on, non-citizens will be eligible for a residence permit by purchasing a residential property of a specified minimum value under the real estate development program for senior residences. In addition, minimum salary requirements for professionals applying for work permits will be standardized. Currently, these requirements vary between MUR 30,000 and MUR 60,000 per month, depending on the sector. Under the new proposal, the minimum wage requirement would be set at MUR 30,000 per month for all sectors. This measure aims to simplify and standardize the eligibility criteria for professionals seeking to obtain a work permit in Mauritius.

Finally, the requirement to contribute to the COVID-19 project development fund for the family residence permit will be abolished, facilitating procedures for families wishing to bring their relatives to Mauritius.

Financial services

The main aim of the bill is to improve the transparency of the financial statements of Protected Cell Companies (PCCs) and Variable Capital Companies (VCCs). Under the proposal, these entities will be able to present separate financial statements for each cell, treating them as independent entities for tax purposes.

With regard to virtual assets, service providers associated with these assets, as well as issuers of initial token offerings, will now be required to submit an annual declaration of financial transactions to the Mauritius Revenue Authority (MRA) for transactions exceeding a certain threshold.

In addition, the Finance Bill suggests that individuals acquiring more than 20% of the issued shares of a company, and thereby acquiring rights of ownership, occupation or use of a property, will have to provide information on the market value of the property and the number of shares allocated to them over the previous 3 years. This information will be essential for registering the deed of transfer with the Registrar.

Personal income tax

To ease the tax burden on low-income individuals, the bill proposes a tax exemption for those earning less than Rs 30,000 per month. It also aims to introduce a progressive tax system, with rates ranging from 0% to 20%. In addition, the solidarity contribution on individual income will be abolished.

At the same time, the bill will set new limits on tax deductions for university tuition fees and health insurance premiums.

Employment and working conditions

One of the Finance Bill’s key measures remains the introduction of a 4-day working week, subject to agreement between employers and employees. This initiative aims to improve the work-life balance of employees while simultaneously increasing productivity within companies.

In addition, the bill makes provision for additional compensation for employees working on public holidays. Employers will be required to pay their workers double their usual salary for the first eight hours worked, and three times the usual salary for all overtime hours worked on public holidays. In addition, to enable workers to better care for their sick elders, the bill proposes to authorize the use of up to 10 days of paid leave, sick leave or vacation leave for this specific purpose.

Business support

To promote job creation and encourage the employment of women and people with handicaps, the Mauritian government is offering employers a monthly allowance of up to Rs 15,000 for each person hired who has been unemployed for at least one year. In addition, further partial exemptions and tax deductions will be introduced to support key sectors of the economy.

With regard to charitable donations, companies will be eligible for a tax deduction equivalent to 300% of the amount donated electronically to charitable institutions helping people with health problems and handicaps, contributing to the rehabilitation of street children or protecting animals. However, this deduction will be capped at MUR 1 million per year.

The bill also extends tax benefits to employers of women benefiting from the Prime à l’Emploi program, as well as to employers of disabled people. In addition, to encourage work-life balance, companies investing in crèches for their employees will benefit from a tax deduction equivalent to 200% of such expenditure.