The Finance (Miscellaneous Provisions) Bill 2021 (“the Bill”) has been released for consultation. This draft legislation incorporates the measures announced by the Honourable Minister of Finance in his Budget Speech on 11 June 2021.
This Alert covers the key tax and regulatory measures contained in the Bill which are still subject to changes following parliamentary debates.
As one would expect in this unprecedented time of several COVID-19 waves impacting local and global businesses with our tourism industry struggling to get back on its feet, the corporate tax regime has been geared towards the provision of tax incentives and credits to companies engaging in specific activities.
Following major changes brought about in personal tax last year, this year’s Bill has not introduced any significant amendments. A number of tax deductions have been introduced that would reduce effective tax rates for individuals. With a view to boost construction sector, incentives are being provided to encourage acquisition of freehold bare land with a view to construct residential building.
With the recent lockdowns, many businesses had to swiftly adopt to remote working and the MRA is following suit in conducting virtual meetings with taxpayers through teleconferencing. Whilst this could expedite closing assessments, it would also mean an increase in tax audits.
A number of incentives are also being offered to non-citizens to work and live in Mauritius including the introduction of a 10-year family occupation permit.
An important amendment being brought to the Income Tax Act is that Trusts and Foundations would no longer be eligible to apply for non-residence and be exempt from income tax in Mauritius. There are still some areas where we were expecting more clarity such as the application of arm’s length principle and implementation of VAT on digital and electronic services.
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