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2011 Budget Focuses on Rebalancing Growth
In the midst of the euro-zone crisis, which will have a direct impact on the Mauritius economy and particularly the export sectors, the Prime Minister, Minister of Finance and Economic Development, Pravind Kumar Jugnauth, presented his first budget. Taxand Mauritius reports on the three key areas the budget focuses on what this means for taxpayers as the euro-zone crisis continues.
The main thrusts of his budget are:
(i) rebalancing growth
(ii) making a great leap forward on productivity
(iii) consolidating social justice
The measures announced under the first theme are about maximising emerging opportunities from the new global infrastructure - reducing dependence on the euro-zone countries whilst moving up to higher value added activities. These activities promote the tourism sector coupled with duty free shopping, strengthening the transformation of the sugar cane industry, giving a spur to information communication technologies / business process outsourcing, as well as the financial services sector. The creation of knowledge and medical hub as well as building the creative industry are new areas that are being looked at to encourage the economy.
On the theme of making a great leap forward on productivity, the focus of the 2011 budget emanates from land, marine and human resources, doing business environment, dissemination of information, physical infrastructure as well as a public sector reform. Initiatives for consolidating social integration are built around eradicating absolute poverty a program of social housing, welfare of children from vulnerable groups as well as taking care of the elders. Electoral promises have been maintained by abolishing tax on interest income and the national residential property tax.
When reviewing the 2010 budget, the Minister noted an overall budget deficit of 4.5% of GDP with public debt is expected to increase from 50.9% at the end of 2009 to 52.5%. With measures in the budget deficit contained at 4.3%, public sector debt will next year be 60.3% despite fiscal measures. Taxation of profit or gains on sale of land and immoveable property will exempt income for high income earners at the rate of 10%. Taxation rate for both individual and companies has remained at 15%.
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Download the full brief on the 2011 Budget from Taxand Maurtius here: