MAURITIUS: BUDGET BRIEF 2023/2024 – AN OVERVIEW OF THE SALIENT MEASURES
On 2 June 2023, Dr the Honourable Renganaden Padayachy, the Minister of Finance, Economic Planning and Development, presented the fourth and penultimate Budget of the Mauritius Government’s mandate.
The theme of this budget was ‘To Dare & To Care’, based on three pillars:
- strengthening the foundations of our economy;
- continuing the transformation of Mauritius into a sustainable economy; and
- building the future we deserve.
Improving the ease of doing business
As was the case in previous budgets, measures have been announced to improve the doing business environment, such as the introduction of a unique identification number for a company; measures to coordinate and ensure implementation of reforms in line with the recommendations of the World Bank; and recognition of certifications including DocuSign and Adobe Sign by the Information and Communication Technologies Authority.
Recognising the importance of the financial services industry in the economy of the country, a series of measures have been announced to maintain the IFC at par with the highest levels of international standards and best practices, including amendments to the AML/CFT framework and the introduction of a Whistleblowing Act. In the same vein, the scope of the VCC has been extended to family offices and wealth management. A new framework will be introduced to support the licensing and operation of electronic money institutions as well as a Wealth Manager and Family Officer Licence under private banking.
In a bid to enhance the export sector, which has seen significant success over the past years, the following schemes have been renewed:
- Africa Warehousing Scheme for a further period of three years to cover expenses in relation to warehousing, expertise and export consulting; and
- The Freight Rebate Scheme and the Trade Promotion and Marketing Schemes to facilitate exports by sea and air:
- 50% reduction in export charges; and
- The Export Credit Guarantee Scheme.
Manufacturing and services hub
Transforming Mauritius into a manufacturing and services hub is one of the objectives announced in this year’s Budget. To this end, several measures have been announced, including the updating of the existing legal framework to position Mauritius as a gateway for the African market and incentives linked to renewable energies and technologies. With a growing number of free trade agreements, schemes to further develop the export and manufacturing sector are welcomed.
Attracting investment in Mauritius
Several amendments will be made to the Occupation Permit and Work Permit to attract more talent and investments in Mauritius. Taking it a step further, the personal tax regime will undergo a complete overhaul whereby a progressive tax regime will be introduced and the solidarity levy will be abolished – a measure which will no doubt please many investors living and earning in Mauritius.
To enhance the jurisdiction of Mauritius as an ESG rated investment destination platform as per ESG Index Risk Map, supporting Climate-Smart Development in Africa, ESG-related projects will be included under the Premium Investor Certificate Scheme.
Whilst the measures announced to strengthen the economy of Mauritius and to make the country a sustainable economy are laudable, we are of the view that more innovative solutions could have been proposed to further improve the competitiveness and long-term sustainability of the Mauritius IFC.
Click here to read our detailed Budget Brief.