Finance Bill 2022 – An overview for businesses

On 22 July 2022, the Cabinet approved the introduction of the Finance (Miscellaneous Provisions) Bill 2022 into the National Assembly. The object of the Bill is to provide for the implementation of the measures announced in the Minister of Finance's Budget Speech 2022-2023. The Bill will be debated and voted at the National Assembly in the coming weeks.

This note highlights the main proposals that the Bill puts forward and that are most relevant for the business community. In particular, it focuses on the proposed changes that concern the financial and operational aspects of businesses. This note does not cover every aspect of the Bill, nor does it amount to legal or other advice.

The partners are also grateful to the firm's associates, pupils and interns for their valuable contribution to this publication over the past weekend.


Areas Covered

  • Income Tax & VAT
  • Employment
  • Corporates
  • Banking
  • Financial Services
  • Real Estate
  • Regulatory & Compliance
  • Miscellaneous



Income Tax & VAT


Global Minimum Tax

In the Budget Speech, the Finance Minister announced his intention to introduce a domestic minimum top-up tax to ensure that resident companies of larger multinationals are taxed at a minimum rate of 15%. The Bill proposes to introduce this tax on a date that remains to be decided. The tax will be imposed in accordance with the Global Anti-Base Erosion Rules (the GloBE Rules) developed by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS). It concerns large multinational enterprise groups (with a turnover of more than EUR 750 million).


Tax on foreign employer of premium visa holder

In 2020, Mauritius introduced the premium visa, allowing non-citizens to work remotely from Mauritius for their foreign organisations for a 1-year period. Where the premium visa holder’s income is remitted in Mauritius, it is deemed to be derived in Mauritius and therefore taxed in Mauritius. The Bill does not propose to change the tax status of premium visa holders. However, it proposes to also impose tax on the foreign employer (whose core business activities are outside Mauritius) in respect of the gross income attributable to the work performed by the premium visa holder in Mauritius.


Angel investor allowance

The Bill proposes to grant a tax relief to an angel investor who invests a minimum of MUR 100,000 as equity in an SME that is set up on or after 01 July 2022. The angel investor will be entitled to a tax relief of 50% of the amount invested, provided that he holds the shares in the SME for at least 36 months and does not, together with his relatives, hold more than 25% of the share capital in the start-up SME. The total tax deduction in an income year will be capped at MUR 500,000, but any unrelieved amount may be carried forward and deducted against the investor’s net income of the 2 succeeding years. The terms and conditions of the tax relief, as well as the eligibility criteria of the angel investor and start-up SME, are not defined in the Bill – they will need to be set out in regulations.

Tax relief on products manufactured locally by SMEs

In 2021, Mauritius introduced a tax incentive to encourage large businesses to buy locally manufactured products. The incentive applied to a manufacturing company whose annual turnover exceeded MUR 100 million in an income year. Where that large company bought products manufactured locally by SMEs (that is, companies whose turnover did not exceed MUR 50 million), the large company was allowed an additional 10% of the purchase expense as tax deduction.

The Bill proposes to allow the large businesses to benefit from the tax relief on the expenditure incurred in purchasing products manufactured locally by SMEs whose turnover do not exceed MUR 100 million (as opposed to MUR 50 million only), retrospectively from 1 July 2021. The Bill also proposes to increase the tax relief from 10% to 25% of the expenditure incurred from 1 July 2022.


Exempt income


The Income Tax Act currently provides that transport allowance payable to an employee is exempt from income tax up to 25% of the monthly basic salary or MUR 11,500, whichever is the lower. The Bill proposes to increase the exemption to 25% of the monthly basic salary or MUR 20,000, whichever is the lower.

 The Bill also proposes to exclude tax on the following income:

  • Income derived by a person using an innovative agricultural method under the Integrated Modern Agricultural Morcellement Scheme administered and managed by the EDB during 8 succeeding income years as from the income year in which the person starts the activity.
  • Income derived by a person engaged in sustainable agricultural practices and registered with the EDB during 8 succeeding income years as from the income year in which the person starts the activity.
  • Income derived by a freeport operator or private freeport developer, provided that it has started its operations on or after 1 July 2022, it has invested not less than MUR 50 million in its operations and it satisfies such conditions relating to the substance of its activities as may be prescribed. The exemption applies for a period of 8 succeeding income years as from the income year in which the company started its operations.
  • Social contribution income allowance received by a person under the Social Contribution and Social Benefits Act 2021.


Value Added Tax (VAT)


E-Invoicing System


The Bill proposes to cause the MRA to set up an e-invoicing system that would allow a business to

(a) connect electronically to the system for registering thereon all invoices, including debit notes and credit notes, generated in the furtherance of the business, and (b) issue fiscal invoices, that is, receipts or invoices to customers to acknowledge the occurrence of transactions. The MRA may require certain businesses to issue such fiscal invoices to their customers, in which case the businesses will need to acquire the relevant equipment and software for that purpose. Regulations will be made to set out the businesses to which the e-invoicing system will apply.


VAT deduction at source by public sector agency

The Bill proposes to require a public sector agency (i.e. a Ministry, a Government department, a local authority, a statutory body or the Rodrigues Regional Assembly) to deduct VAT at source when making payments to VAT-registered persons, and remit the amount deducted to the MRA. The deduction is made in respect of the following contracts at the rates set out below.


  • Goods and services procured under a single contract and where the payment, exclusive of VAT, exceeds MUR 300,000: deduction of 40% of VAT amount.
  • Goods procured under a contract and where the payment, exclusive of VAT, exceeds MUR 100,000: deduction of 30% of VAT amount.
  • Services procured under a contract and where the payment, exclusive of VAT, exceeds MUR 30,000: deduction of 60% of VAT amount.


Refund of VAT to certain persons


The VAT Act currently provides that a planter or horticulturist, who is not required to be VAT- registered, may apply for a refund of VAT paid on certain equipment and services. The Bill proposes to provide that refund only to a planter, group of small farmers having an annual turnover not exceeding MUR 10 million, or a horticulturist, provided that they are registered with the Small Farmers Welfare Fund or as a co-operative society under the Co-operatives Act.
The VAT Act also currently provides that an event organiser registered with the EDB may apply for refund of VAT in respect of accommodation costs incurred by visitors attending an event. Among other conditions, the event should be attended by at least 100 visitors for the refund to apply. The Bill proposes to make the refund available in respect of events that are attended by at least 50 visitors (instead of 100 visitors).
Further, the VAT Act currently provides for the refund of VAT on residential building, house or apartment where the cost of the construction or purchase price does not exceed MUR 3 million (among other conditions). The Bill does not propose to change this condition where the construction started, or the purchase was made, before 31 July 2022. Conversely, where the construction has started, or the purchase is made, after 31 July 2022, the Bill proposes to remove this condition of eligibility and replace it with the condition that the floor area of the residential building, house or apartment does not exceed 1,800 square feet.



Read the full publication at Orison Legal.


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