November 2012: Mauritius National Budget 2013 Highlights
Dear Valued Investors,
The 2013 National Budget gives a great boost to Mauritius as an investment destination on three fronts while narrowing the economic and educational divide between various groups and accelerating the technological transition. It singularly recognises our youth and the hope that they carry nationally.
Our macroeconomic fundamentals favour growth. Direct incentives will reduce the cost of doing business. Carefully crafted levers are in place to trigger sectoral activities and expand our economic space. Despite the prevalent international economic context, our current year will end with an appreciable growth rate of 3.4%, with a forecast of 4% in 2013. The budget deficit will be reduced to 2.2%.
The outlook will improve with public sector debt capped at 53.6% and an increased capital expenditure of MUR 28.6 billion to be spent on road network, the port and airport and other productive infrastructure.
Certainty and predictability are important to international investors. The budget gives a helpful nudge to our investors through unchanged corporate taxation, reduced international private leased circuits costs by 15%, direct cash incentives for employers recruiting and training young talents and accelerated capital allowances for investments in green technology, amongst others.
In addition, an annual fee of MUR 500 that replaces the expatriate work permit bank guarantee will free up considerable working capital for export-oriented enterprises.
SMEs remain an important component for ensuring sustained growth in developing economies. Therefore, SMEs will now benefit from easier access to finance with reduced costs while those with a turnover of less than Rs 4 million will be removed from the VAT net.
Investment facilitation will also be enhanced with the implementation of a new business unit at BOI. It will be operational in 2013.
With an overall positive economic performance, Mauritius is well positioned in the “golden triangle of growth”, acting as the natural investment and business platform between Asia, Middle East and Africa. The Budget provides for the removal of barriers to African citizens travelling to Mauritius. Businessmen and tourists from 29 additional African countries can now obtain visas upon arrival.
In the spirit of further enhancing our position as the leading business platform for Africa, multinationals will be encouraged to set up their Regional Head Quarters and Regional Treasury Centres in Mauritius. Moreover, manufacturing firms will be allowed to benefit from Freeport status, subject to certain eligibility criteria.
New impetus has been given to all sectors of activities, whether traditional or emerging. Financial services, education, health, tourism, entertainment and shopping, manufacturing and other export-oriented industries, agriculture and fishing and ICT-BPO will all receive significant boosts through measures announced.
In addition, to promote the development of the ocean economy, a strategic partnership is proposed for the exploration and exploitation of our EEZ. The renewable energy sector is also given a boost, through requirements for energy efficiency services and fiscal incentives for a greener Mauritius.
Pointing out the sustained increase in level of FDI, the budget provides a set of measures that will assist BOI in further promoting Mauritius as an investment destination and as a provider of services for the region. This budget includes measures that reinforce the strategy to further open up the economy.
In a difficult global environment where first-world economies are faced with restricted fiscal space and turning to protectionism, the 2013 Budget resolutely embraces the pursuit of diversification and sustained growth through macroeconomic stability, broadened economic space and a careful response to the needs of investors and operators.
We shall move forward on this journey of growth with expectancy. We, therefore, invite you to read our sectoral analysis and join us as we help Mauritius rise to the challenges of a world in transition.