On 08 November 2013, the Vice Prime Minister and Minister of Finance and Economic Development, Hon. Xavier Luc Duval, delivered his third budget speech titled “Building a Better Mauritius – Creating the Next Wave of Prosperity”
The economic indicators for 2013 put forward by the Finance Minister indicate an inflation rate of 3.6%, growth at 3.2%, unemployment rate at 8.3% and a budget deficit of 3.7%.Refered to as “positive and populist” by the firm Grant Thorton, this budget includes a set of measures meant to support the economic growth of the country. Some keys measures of the budget:
Property taxation and duties
Land Transfer Tax at 5% will be applicable on transfer immovable properties where deeds are registered on or after 1st January 2014 irrespective of the period of ownership.
The rates of registration duty on acquisition of an IRS/RES and land transfer tax are being revised as follows:
- For IRS, Land transfer tax on resale of residential property: USD50,000 or 5% of the resale amount For RES, Registration duty on acquisition of residential property: USD25,000 or 5% of the resale amount
- For RES, Land Transfer Tax on resale of residential property : USD25,000 or 5% of the resale amount
Current exemption from Land Transfer Tax and Registration duty under the Construction of Housing Estates Scheme is being extended for an additional year to 31 December 2014 provided construction is completed by 31st December 2015 and sale of residential units prior or during construction is effected by way of Vente en l’Etat Futur d’Achèvement ‐ VEFA
Increase in Morcellement Fee, applicable to new morcellements where applications for morcellement permit are made after 8 November 2013. For residential morcellement of less than 8 lots, the fee changes from MRU 10 per m2 to MRU 15 per m2. For residential morcellement of 8 lots or more, the fee changes to MRU 30 per m2. Commercial or industrial morcellement, the fee remains unchanged at MRU 10 per m2. For mixed use morcellement purposes, the fee for the residential part will be calculated at MUR30 per m2 in proportion of the acreage identified for residential purposes.
Banking sector: more facilities regarding Housing Loans
- The Housing Empowerment Scheme concerns middle-income households with combined monthly salary reaching MRU 50 000. The rate of the required downpayment by the bank will be revised from 10% to 5%/. Borrowers would be granted a two-year moratorium to pay back the capital amount while the government would guarantee 20% of the borrowed amount.
- Tax reimbursement on housing loans for houses costing less than MRU 2,5 million.
- VAT shall be reimbursed up to MRU 300 000 for any house costing less than MRU 2,5 million
- Households with income not exceeding MRU 15 000 shall be eligible for the Water Tank Scheme
Strengthening the tourism sector
A set of measures aimed at improving services proposed the national aviation company and filling up hotel rooms during off-peak periods thanks to new services and facilities. A Joint Public Private Committee will be put in place to promote the new services. The MTPA shall act as a linkage with emerging markets to increase flights to the island. Emirates Airlines would launch a new airline, for example, the A380. Flights to Russia and Africa shall be improved. Concerning Air Mauritius, a new strategy regarding Asian destination shall be defined.
Targeting emerging markets
Mauritian authorities wish to host more and more tourists coming from various countries during off-peak periods. A Special Fund of MRU 25 million shall be invested to encourage more tourists from emerging countries to visit the island. To do so, an independent study shall be carried out to analyze air ticket rates.
Revised Visa and Occupation permit procedures
Procedures to obtain Mauritian visas and occupation permits shall be revised to encourage more wealthy tourists and high-end professionals to come and settle in Mauritius.
In order to boost investment and growth, massive investment of around MRU 18,4 million shall be made next year within the Mauritian economy for the development of airport infrastructures, in line with the Build Mauritius Plan. The projects in the pipeline include the construction of an Aviation hub, a Cargo hub, a Regional Training Centre for aircraft maintenance and repairs.