Editor's Note

In the context of the 2008 National Budget proposals announced by the Deputy Prime Minister and Finance Minister of the Republic of Mauritius, Dr the Hon. Ramakrishna Sithanen on 6 June 2008, the MRA is glad to offer a special edition of the MRA E-Newsletter. The focus of this issue is on the proposed Tax Policy, as stated in the Budget Speech 2008 and the aim of the MRA is to enlighten the readers of the MRA E-Newsletter through a clear and simple portrayal of these measures. It is to be noted that tax revenues increased to Rs 46.4 billion in 2007-08 (compared to Rs 38.5 billion in 2006-07), which is, according to analysts, “ indicative of a strengthening economy, greater compliance and improved administration and collection.”

Pertaining to budget proposals concerning Value Added Tax (VAT):

Pharmaceutical products which are currently exempt from VAT have become zero-rated as from Financial Year 2008/09.

Potassium nitrate, mono potassium phosphate and magnesium sulphate used for hydroponics culture are no longer subject to VAT as from financial year 2008/09. Presently VAT is levied on these items at the rate of 15%. The introduction of this measure, as announced in budget speech, will encourage large production of agricultural goods for food security purposes.

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• Increase in Exemption Thresholds for
  Categories A,B,C & D
   
• Two Special Income Exemption Thresholds for Pensioners (Read more)

• Registration Duty
   
• Land Transfer Tax                        (Read more)

Several items will be subject to Excise Duty rather than Customs Duty at the same rate in order to improve compliance to the World Trade Organisation (WTO) recommendations. This should have no incidence on price or revenue.

Customs Duty will be abolished and cigarettes will be subject to a single rate of excise duty of Rs 2,200 per thousand cigarettes. Excise duty on alcoholic beverages will also be reviewed with marginal changes in prices

Excise duty on locally manufactured goods (as is the case for imported goods) will be paid upon the validation of the Declaration at Customs. Earlier, it had to be paid within 7 days from the end of the month in which declaration was made.

Hybrid vehicles will be subject to 50% of the current excise duty rates as from 1st July 2008. Road tax and registration fees will also be halved for such vehicles. It is to be noted that customs duty will be abolished on tyres with energy saving and emission-reducing certification. (Read more)

Gambling Tax

The taxation of Casinos and Gaming Houses will be reviewed for the development of a leisure, hospitality and entertainment industry.

The Mauritius Revenue Authority (MRA) will be called upon to provide aggregated statistical data to the Central Statistical Office (CSO) whilst fully protecting confidentiality and from the MRA to the Board of Investment (BOI) in cases of fraudulent declarations by non-citizens for occupation permits.