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Mauritian 2013 Budget Revealed
The 2013 Budget has been presented in Mauritius by the Deputy Prime Minister, Xavier Luc Duval. In his speech, the Minister placed a significant emphasis on Mauritius as an investment platform for Africa as well as Other measures such as positioning Mauritius to benefit from the setting up of Regional Treasury Centres and Regional Headquarters and extending the network of Double Taxation Avoidance Agreements, as well as Investment Promotion Protection Agreements. Taxand Mauritius explores the key amends to income tax and VAT.
- Companies are exempt from income tax for global funds which do not make use of benefits under double taxation avoidance agreements.
- As from 1 January 2013, taxpayers will be allowed an irrevocable option to be taxed on any surplus arising from foreign exchange differences on a realisation basis. This will be clarified by a Statement of Practice Tax Deduction at Source, (TDS) rate on interest payable to a non-resident is to be increased from 10% to 15% (not applicable to Global Business Companies)
- The annual turnover for compulsory VAT registration will be raised from Rs 2 million to Rs 4 million.
- VAT refunds on purchases of fittings, equipment and furniture from high street retail shops and restaurants within 7 days of claim made.
- The current VAT refund system will be revamped to encourage the development of shopping by visitors at the port and airport.
The Budget also showed that the inflation rate is expected to be 4.1%, the growth rate is at 3.4% and this year's budget deficit is expected at 2.5%. The overall debt level has fallen to 54.2% of GDP. Whilst this is very much a business as usual budget, it's hard not to question whether it meets the requirements of a small country facing significant economic challenges.