The Economic Development Board (EDB) of Mauritius Unveils National Budget for 2023-2024:
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The Economic Development Board (EDB) of Mauritius Unveils National Budget for 2023-2024: A Path to Sustainable Economic Growth
The Economic Development Board (EDB) of Mauritius has recently released its highly anticipated Newsletter on the National Budget for the fiscal year 2023-2024. This comprehensive report outlines the strategies and policies put forth by the government to ensure the continuous economic recovery and transformation of Mauritius into a modern, sustainable, and resilient country.
A Strong Recovery Amid Global Challenges
In the face of numerous global challenges, including the ongoing COVID-19 pandemic, geopolitical tensions, global supply chain crises, and inflationary pressures, the Mauritian economy has showcased a remarkably strong recovery in 2022. The economic fundamentals have been restored to pre-pandemic levels, with an impressive economic growth rate of 8.7%.
The Mauritian economy has achieved significant milestones, with noteworthy inflows of Foreign Direct Investment (FDI) amounting to MUR 27 billion. Furthermore, the tourism sector has generated remarkable receipts totaling MUR 64.8 billion, while the export of goods and services has exceeded MUR 320 billion in value.
Building on Strong Foundations: Ambitious Economic Objectives
The budget for 2023-2024 aims to build upon the strong foundations laid in the previous year and strive towards even higher and more ambitious economic objectives. The primary goal is to secure a GDP growth rate of 8% for the upcoming fiscal year. To achieve this, the government aims to enhance revenue generation and implement effective expenditure management.
The projected government revenue for the fiscal year 2023-2024 is expected to reach MUR 179 billion, while expenditure is forecasted at MUR 200 billion. This balance between revenue and expenditure will result in a manageable deficit of 2.9% of GDP. Additionally, the government plans to decrease the public debt to 79% of the GDP by 2023, with further reduction to 71.5% by June 2024.
Tax Reforms: Promoting Competitiveness and Equity
The budget places significant emphasis on tax reforms as a centerpiece of this year's budget. The restructuring of the Income Tax regime is a key fiscal reform aimed at restoring the competitiveness of the Mauritian economy while ensuring fairness and equity for earners.
Enhancing the Business Environment and Attracting Foreign Investment
Recognizing the pivotal role of foreign investment in driving economic growth, the budget outlines measures to improve the business environment and attract investments. Actionable frameworks, strategy recommendations, and facilitation processes will be introduced to promote a conducive business environment and stimulate investment.
To bridge talent gaps and address the skill set needs of companies, the occupation permit for professionals will undergo a comprehensive review. This will ensure a skilled workforce that meets the demands of various industries. Moreover, the budget outlines a new direction for the skilling and res killing of employees, with a focus on enhancing the learning and development ecosystem.
Efficiency and promptness will be prioritized in bureaucratic processes through the introduction of the "silence is consent" principle. This principle aims to streamline the processing of permits and licenses, reducing delays and fostering ease of doing business in Mauritius.
Prioritizing Environmental, Social, and Corporate Governance (ESG)
The budget introduces long-term measures, targets, and incentives to emphasize the importance of environmental, social, and corporate governance (ESG) in Mauritius. By integrating sustainability into future development and economic strategies, Mauritius aims to align itself with global sustainability goals.
Climate change policies hold considerable importance in the budget's agenda. Recognizing the urgent need to combat climate change, the government intends to implement proactive policies and initiatives that promote environmental preservation and sustainability.
Key Announcements: Facilitating Residence Permits and Tax Reforms
Alongside the broader strategies outlined in the budget, several key announcements have been made to facilitate residence permits and implement tax reforms. Notable highlights include:
- A non-citizen, holder of a resident permit or occupation permit as the main applicant, will be allowed to acquire only one residential property outside of schemes (Smart City and PDS) for a price exceeding USD 500,000. This acquisition will be subject to payment of an additional registration duty of 10%. The property should not exceed 1.25 arpents and should not be located on State land.
- A residence permit will be granted to retired non-citizens and their families upon the acquisition of a property in a PDS project relating to senior living, where the acquisition price exceeds USD 200,000.
- Non-citizens and their families will be granted a residence permit upon the acquisition of residential property with a minimum price of USD 375,000 under the new Sustainable City Scheme.
- The time limit for the acquisition of one plot of serviced land by resident non-citizens in a smart city or a PDS project has been extended until 30 June 2026.
- A non-refundable processing fee will be applicable for acquisitions under IRS, RES, PDS, IHS, Smart City, and Ground +2. The processing fee for residence permits will be MUR 25,000.
- Retired non-citizens applying for a residence permit will not be required to open a local bank account in the initial stage.
- Foreign retirees will be allowed to take up employment in specific sectors.
- The Immigration Act will be amended to grant a residence permit to a retired non-citizen and their family on the acquisition of a property in a PDS project relating to senior living, provided that the acquisition price exceeds USD 200,000 and the non-citizen is aged above 50 years old.
- The monthly basic salary threshold for the Occupation Permit for Professionals will be reduced to Rs 30,000, irrespective of sectors.
- The initial investment requirement of USD 50,000 for investors and USD 35,000 for self-employed individuals will be exempted at the time of permit issuance. Evidence of fund transfer within 4 weeks of permit issuance will be required, and post-monitoring will be carried out.
- The income tax structure will be revised, with different tax brackets based on annual chargeable income. The revisions include zero percent tax on the first Rs 390,000, with increasing rates for different income ranges.
- Starting from July 1, 2023, individuals with no dependents and a chargeable income up to Rs 30,000 monthly (Rs 390,000 annually) will not pay any income tax.
These announcements aim to provide clarity and facilitate the acquisition of residence permits while implementing tax reforms to ensure fairness and promote economic growth in Mauritius.
To read all the news: https://edbmauritius.org/wp-content/uploads/2023/06/EDB-Budget-Newsletter.pdf
Author: Pierre