Mauritius National Budget Legal Highlights 2021/2022 | Dentons


An overview of the key legal updates from the Mauritius National Budget presented by the Minister of Finance and Economic Development on 11 June 2021.

Financial services

  • A Financial Crime Commission will be established for effective management in the fight against financial crimes.
  • A securitisation bill and a new securities bill will be introduced.
  • The tax holiday for family offices, and asset and fund managers, will be extended from five years to 10 years.
  • New legislation for virtual assets will be enacted and the Bank of Mauritius (BOM) will roll out a central bank digital currency, the Digital Rupee, on a pilot basis.
  • The BOM will introduce a dedicated QR code at national level to facilitate digital payments.
  • A new Bank of Mauritius Bill and Banking Bill will be introduced, reflecting best international practices. The BOM guidelines allowing the setting up of regional offices by international banks will be revamped in line with latest international trends.
  • The BOM and the Financial Services Commission (FSC) will set up, respectively, an open lab for banking and payment solutions, and a fintech innovation lab to encourage an entrepreneurship culture.
  • The FSC will implement a digital centralised exchange system to facilitate motor insurance claim recovery.
  • The FSC One Platform will be launched as an online licensing portal from 1 July 2021.
  • The Stock Exchange of Mauritius will introduce rules for the setting up of special purpose acquisition companies.


Promotion of agriculture

  • Zero-rating VAT and exempting import duties on animals for the purpose of training, breeding and re-export. Breeding activities exempted from registration duty.

Promotion of biotechnologies and pharmaceutical activities

  • Pharmaceutical companies will be able to benefit from exemption on registration duty and land transfer tax, land conversion tax and VAT on construction.
  • Biotechnology and pharmaceutical companies will be allowed a full tax credit on the costs of acquisition of patents.
  • Companies engaged in the medical, biotechnology and pharmaceutical sector will be taxed at 3% instead of 15%.

Promotion of education

  • The construction and expansion of student campuses will be exempted from land transfer tax and registration duty.
  • A concessional 3% corporate tax rate to private universities set up in Mauritius.

Small and medium enterprises (SMEs), and entrepreneurship

  • Extension of the exemption on trade fees for SMEs not exceeding MUR 5,000 for an additional five years.
  • Extension of the Tax Arrears Settlement Scheme for SMEs up to December 2021.
  • 110% deduction will be allowed on taxable income for the direct expenditure incurred on the purchase of products manufactured locally by SMEs.
  • Amnesty on payment of specified trade fees.
  • Rebate of up to 30% on the annual rental of industrial space to SMEs engaged in the manufacturing sector over the next three years.

Promotion of construction and property development

  • Reduction in the registration tax on transfer of lease of state lands from 20% to 10% for hotels for a two-year period.
  • The sale of a residential unit in a project developed on state land relating to senior living under the Property Development Scheme will be exempted from the payment of tax on transfer of leasehold rights in state lands.
  • Reduction of 5% excise duty on electric vans of up to 180KW used for the transport of goods.
  • Value Added Tax (VAT) is payable on the transfer of a commercial or industrial building. It will be clarified that land duties and taxes will be levied on the value of the immovable property, excluding any VAT payable.
  • A Mauritian citizen buying a house, an apartment or bare land to construct a residential unit will be eligible to a payment representing 5% of the declared value of the immovable property up to a maximum of MUR 500,000 per property acquired.
  • Exemption of registration duty for first-time buyers of houses, apartments or for construction of houses.
  • Refund of VAT on construction of a house or residential apartment. The cost of construction of a residence or the purchase price of the residence should not exceed MUR 3 million.

Goods and commodities

  • Levy of MUR 2 per litre on mogas and diesel for the purchase of vaccines.
  • Increase in excise duty in tobacco and alcohol by 10%.
  • Tax of 6 cents per gramme of sugar on locally manufactured and imported non-staple sweetened products, which was announced in the Annex to the Budget Speech 2020-21 and will be effective from 1 July 2022.
  • The preparation and supply of dumplings made up of meat, fish, squid, crab, chicken, vegetables or milk, whether cooked or uncooked, to final consumers is zero-rated for VAT purposes.

Promotion of manufacture

  • Freight rebate scheme extended to June 2022.
  • Maximum refund increased from 0.2% to 0.5% under the Export Credit Guarantee Scheme up to June 2022.
  • 50% reduction in port dues and terminal handling charges for export extended for two more years.
  • Reduction on anchoring dues and fees in specified circumstances.

Transformation and modernisation

  • A 200% deduction from taxable income will be allowed on the acquisition of specialised software and systems.

Promotion of financial services

  • The tax holiday for family offices, as well as fund and asset managers, will be extended from five to 10 years.

Income tax

  • In order for a self-employed individual to benefit from the Self-Employed Assistance Scheme, he or she should be paying the Contribution Sociale Généralisée (CSG) from 1 July 2021.
  • The Income Tax Act will be amended to cater for the government decision to refund to an SME the salary compensation paid to its employees (i.e. a maximum of MUR 375 per employee monthly, for the period January to June 2021).
  • Individuals and enterprises contributing to the COVID-19 Vaccination Programme Fund will be allowed to deduct the amount contributed from their taxable income at the time of submission of their income tax return.
  • The Income Tax Act will be amended to ensure that foundations and trusts benefiting from a preferential tax regime comply with the OECD standards, including substantial activity requirements.
  • A small enterprise is eligible, at its option, to pay a presumptive tax of 1% of its turnover and is not required to declare its chargeable income. It will, therefore, be clarified that such an enterprise is exempted from any Corporate Social Responsibility (CSR) obligation.
  • A company is allowed to use 25% of its CSR funds to implement a CSR programme or finance a non-governmental organisation implementing a CSR programme in the specified priority areas of intervention.
  • The 10% tax imposed on winnings will also cover winners of Loterie Vert.
  • The levy paid by gambling operators as per Section 114 of the Gambling Regulatory Authority Act will not be allowed as a deduction for income tax purposes.
  • Increase in threshold for the maximum exemption in respect of a child pursuing tertiary education to MUR 225,000.
  • Exemption in respect of donations made to an approved charitable NGO or religious bodies up to an amount of MUR 30,000.
  • Exemption of an amount of up to MUR 30,000 in respect of an individual pension scheme.

Value Added Tax

  • The National Empowerment Foundation and the New Social Living Development Ltd will be made exempt bodies for VAT purposes in respect of the construction of social housing.
  • The remittance of 0.4% of net VAT collection credited by MRA on a quarterly basis into the Film Promotion Fund will be discontinued.

Real estate and hospitality

Real estate

  • Creation of 12,000 residential units.
  • Approximately MUR 12 billion in infrastructure investment.
  • MUR 5 billion investment in local community development programmes.
  • MUR 8 billion investment in urban transport terminals.
  • Validity of foreign Occupation Permit extended from three years to 10 years.
  • Approximately MUR 5 billion investment in the extension of the Metro system.


  • Reopening of Mauritian borders to foreigners: subject to (quarantine) conditions as from 15 July 2021 and full reopening (subject to PCR test) as from October 2021.
  • Creation of dedicated portal for foreign retirees investing in Mauritius.
  • Aim to attract 50,000 new retirees.


Occupation Permit (OP) for professionals

  • Increase of the OP validity period from three to 10 years.
  • Spouses of OP holders who wish to work and invest in Mauritius will be exempted from the occupation or work permit requirement.
  • The 24-year age limit for dependants will be waived.
  • New category of OP: A 10-year family OP for those contributing USD 250,000 into the COVID-19 Projects Development Fund.
  • Economic Development Board (EDB) will set up a concierge service to enhance investor and retiree experience.
  • A privilege club scheme providing a range of incentives to OP holders and retirees.

International students undertaking further education in Mauritius

  • Will be granted a work permit of 20 hours per week during studies.
  • Will be granted a 10-year renewable Young Professional Occupation Permit after graduation.


  • A special desk at the EDB aiming to attract at least 50,000 foreign retirees in Mauritius during the next financial year.
  • Launch of a dedicated portal for foreign retirees.

Invest Hotel Scheme

  • Sale of up to 80% of units with the owner of the room being able to stay for a maximum of six months.
  • Minimum selling price of a standalone villa decreased from USD 500,000 to USD 375,000.


The Budget 2021-2022 emphasises the need to protect livelihoods and jobs and therefore introduces the following measures:

  • Extension of the Wage Assistance and Self-Employed Assistance Scheme to tourism-related companies up to September 2021.
  • Payment of a monthly salary compensation of MUR 375 for SMEs for the next financial year.
  • Introduction of the relevant laws to allow self-employed individuals to be eligible for benefits in case of injury at work, provided that they are registered with the Mauritius Revenue Authority and contributing to the CSG system.
  • International students enrolled in a recognised educational institution in Mauritius will be allowed to have a 20 hours per week work permit, and a 10-year renewable Young Professional Occupation Permit upon graduation.
  • Review of the validity period for the Occupation Permit for Professionals to 10 years.
  • Increase in the Bad Weather Allowance from initially MUR 425 to MUR 475 for fishermen. Fishermen aged over 65 will be allowed a lump sum of MUR 52,500 if they return their Fishermen Registration Cards or transfer them.

Amendments to the Workers’ Rights Act

  • Payment under the Wage Guarantee Fund when the business has been placed into receivership, administration or liquidation.
  • Application for the payment of additional remuneration will be facilitated.
  • Workers earning more than MUR 50,000 and employed on determinate contracts, who are paid a gratuity or a compensation at the end of their contracts, will not be entitled to the payment of severance allowance.
  • The Redundancy Board will set up a conciliation and mediation service.
  • A receiver and manager or an administrator may apply to the Redundancy Board for cases of intended reduction of workforce.
  • The application of a protective order to situations where an order for the payment of severance allowance has been made by the Redundancy Board.
  • The definition of “remuneration” will include a claim of severance allowance lodged at the Industrial Court and any gratuity on retirement payable under the Portable Retirement Gratuity Fund.
  • Extension of the application of the Portable Retirement Gratuity Fund to jockeys and track riders engaged in horse racing activities, and such other category of workers as may be prescribed.
  • An employer will be committing an offence if failing to submit information or documents related to a charge against a worker appearing before a disciplinary hearing, or failing to submit minutes of proceedings to the worker or to the person assisting the worker.

Environmental, Social and Governance

In relation to ESG matters, the National Budget 2021-2022 placed more emphasis on the environmental aspect, including the below measures to promote green energy and address climate change vulnerabilities.

Green energy

The aim of the government is to produce 60% of Mauritius’ energy needs from green sources and to phase out the use of coal before 2030.

  • Allocation of MUR 650 million for renewable projects, such as setting up solar panels and provision of solar water heaters to 2,000 households.
  • Investment of MUR 1 billion by Mauritius Investment Corporation to address water shortage in Rodrigues.
  • Investment of MUR 5.3 billion by the Central Electricity Board (CEB) over the next three years to:
    • raise the absorption capacity of intermittent renewable energy through increased battery capacity to some 40MW from the current 4MW;
    • set up 10 Gas Insulated Switchgear substations to improve reliability and increase the share of renewable energy;
    • implement the various renewable energy schemes of the CEB for households, businesses, SMEs, religious bodies and NGOs;
    • implement the Net Billing projects; and
    • set up a solar farm of 10MW at Tamarind Fall, Henrietta.
  • Request by the CEB for a proposal to set up a 40MW green farm (MUR 2.4 billion investment).
  • Enabling the companies and individuals to provide renewable energy directly to the CEB with a price which is below the maximum tariff set.
  • Provision of a concessionary loan of 2% up to an amount of MUR 100,000 by the Development Bank of Mauritius (DBM) to enable households to purchase solar kits for domestic use.
  • Provision of training in the fields of renewable energy and energy efficiency by the CEB’s “Centre de Formation et de Perfectionnement Professionnel” which will become an accredited centre.

Electric vehicles

  • Removal of the 5% excise duty on electric vans of up to 180KW used for the transport of goods.
  • Allowing electric vehicle owners to instal a photovoltaic system not exceeding 10KW to charge their vehicles and export any surplus to the grid.
  • Increase in subsidies for the purchase of 9-metre electrical buses from MUR 1 million to MUR 1.2 million and from MUR 1.3 million to MUR 1.5 million for buses over 9 metres.
  • Purchase of 25 electric buses by the government for National Transport Corporation to renew its fleet.

Pollution and waste management

  • Allocation of MUR 2.2 billion to the National Environment Fund.
  • Establishment of the National Environment Cleaning Authority with a seed funding of MUR 100 million.
  • Allocation of MUR 790 million for cleaning, embellishment and solid waste management.
  • Allocation of MUR 200 million to promote circular economy by setting up six composting plants at a capacity of 12,000 tonnes of green waste at various locations, and by introducing a sustainable public procurement framework to promote green procurement by public bodies.
  • Management of electronic and electrical waste will be subject to guidelines established under the Environment Protection Act 2002.

Blue economy

Maritime vessels

  • Vessels calling at outer anchorage solely for bunkering services will be granted a 75% reduction in anchorage dues for the first 24 hours and 50% reduction for the following 48 hours.
  • The cap on gross tonnage for computing vessel fees calling at anchorage will be reduced from 100,000 tonnes to 35,000 tonnes.
  • The freight rebate scheme offered by the EDB will be extended to June 2022.
  • The maximum refund shall be increased from 0.2% to 0.5% under the export credit guarantee scheme offered by the EDB up until June 2022.
  • The 50% reduction in import dues and terminal handling charges for export will be extended for an additional two years.
  • The EDB will launch an e-exports directory to display all products available for export and to facilitate the movement of goods.
  • The Mauritius Freeport will play a greater role at shaping Mauritius as a leading trade hub by:
    • enabling third party Freeport developers to rent space to any enterprise outside the Freeport zone for manufacturing and storage of foods; and
    • adding display showrooms to the list of Freeport authorised activities.

Fishing industry

  • 500 new Fishermen Registration Cards will be provided.
  • The bad weather allowance will be increased from MUR 425 to MUR 475 per day.
  • Every fisherman aged 65 years and over will receive a lump sum of MUR 50,000 if they return their Fisherman Registration Cards or transfer them.
  • 1,800 artisanal fishermen will be provided with annual financial assistance of MUR 2,500 for the purchase of fishing hooks.
  • The DBM will make available the following loans to fishermen:
    • MUR 100,000 interest-free loan for cash flow issues; and
    • a 0.5% COVID-19 support scheme of up to MUR 1,000,000.
  • The DBM will endeavour to provide amnesty to help fishermen who are faced with long-overdue loans.
  • Navigation aids shall be installed at 22 various sites to promote safe navigation.
  • The use of fibreglass vessels, with a length of 24 metres or more, will be authorised for fishing activities.

Compliance/Anti-Money Laundering and Combatting the Financing of Terrorism and Proliferation (AML/CFT)

FATF action plan implementation and grey list early exit

  • Government remains committed to be fully compliant on AML/CFT matters and complete the implementation of the Financial Action Task Force (FATF) Action Plan for early exit from FATF list of jurisdictions under increased monitoring.

Financial Crime Divisions at Supreme Court and Intermediate Court

  • Financial Crime Divisions have been set up at the Supreme Court and Intermediate Court to ensure that financial crime cases are dealt with expeditiously.

Financial Crime Commission

  • Financial Crime Commission will be established for more effective management in the fight against financial crime.

AML/CFT training programme

  • The BOM and FSC will launch one-year training programme on anti-money laundering and related matters.


The above overview, which does not constitute legal advice, may have missed out on issues which may be key to some. You should consult the Bill and seek legal advice on any matter of concern to you.


Source link