1) The budget aims to balance economic growth with social inclusion by addressing issues that have stifled growth while also supporting sectors like healthcare, housing, and education. 2) Fiscal measures include abolishing various taxes to incentivize business as well as new taxes on SMS messages and offshore companies. 3) The budget forecasts 4% GDP growth in 2012 and maintains the budget deficit at 3.8% of GDP through revenue measures and expenditure control.

1. COMMUNICATIONS
e-Budget Brief
NOVEMBER 2011
page 1

2. Nexus of Business facilitation, fiscal rebalancing, social inclusion
for good of growth
The professional background of the Honorable Xavier Luc Duval, the first chartered accountant to act as Finance Minister, comes
across clearly in his budget. He, in fact, favors prudence and pragmatism over economic theories. The budget takes into account
the murky waters of the global economy and the recurrence of shocks of globalization which a small island economy like ours is
exposed to. The recent economic turmoil has put forward various imperfections of our economy which may have stifled growth. He
is forecasting a marginal reduction in growth to 4.0% from 4.2%.
The Minister of Finance has addressed the previous simplistic policies that might have curtailed growth through fiscal measures:
- Abolition of solidarity levy tax on dividends and interests
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- Abolition of capital gains tax
- CSR Tax now computed on chargeable income, thereby avoiding the cascading effect of dividend income being taxed 2
twice or more
- Abolition of business rates by Municipalities
- Fiscal incentives to Freeport companies extended indefinitely
He has also realised that the various public sector institutions need reform and some will even require the help of strategic partners,
the aim being to enhance competitiveness of these institutions.
The engines of growth are set to be SMEs and the traditional private sector. The Minister of Finance has in fact elaborated a ‘Marshall
Plan’ for the SMEs which takes into account access to credit, cost of credit, access to space, better access to markets and ease for
financial institutions to account for bad debts.
To balance the growth for good he has given an impetus to the social sector.
e-Budget Brief 2012 / November 2011

3. First, he has bridged the medical care of public and private partnerships by allowing NSF to be used for private health care which
resolves the burden on public health.
Second, he has set the foundation for a strong development of low-cost housing with the setting up of the Housing Development
Trust, partially financed by Government and the CSR funds.
Third, he has embarked on the inclusion of workers of the informal sector within the NPF with Government contributing for the
worker’s share.
Fourth, he has broadened beneficiaries of sports activities by encouraging the private sector to employ high-potential athletes and
also assist them in benefitting from the Trust Fund.
Fifth, he has ensured that the unemployed acquire on-the-job experience with the assistance of HRDC and Government sharing in
the stipend.
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However, to balance his books and to ensure that his budget deficit is maintained at 3.8% of GDP and to reduce its Debt to GDP ratio
to a more cautious level of 54%, he has been innovative with his fiscal measures:
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- Tax of 10 cents on sms
- Offshore Management Companies be charged solidarity levy in addition to banks and telecoms
- Tax amnesty for a specific window - June 2012
Overall, the Minister of Finance has set policies with a view to steer the economy towards a robust resilience and fiscally prudent
manner by drawing lessons from economies that are currently in dire situations. He has redressed anomalies and has put the ball
squarely in the hands of investors to take advantage.
This is not a budget to be judged as a ‘one-off’ but is part of a process, of a vision for the betterment of the economy provided no
further external shocks force a change in direction. In summary, it is about sustainable growth, private sector initiatives, an SME
Marshall Plan, affordability of services, institutional reforms and catering for the most needy.
e-Budget Brief 2012 / November 2011

4. PURSUIT OF GROWTH FOR THE GREATER GOOD
• Setting the basis for strong growth
• Riding out the crisis
• Improving social protection
• Fiscal reform
MAIN ECONOMIC INDICATORS FOR 2011
• Real GDP growth rate of around 4.2%
• Unemployment rate of 7.8%
• Inflation rate of 6.5%
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• Budget deficit estimated at 3.8% of GDP
• Public sector debt of 54.2%
Despite the high fuel bills, the Balance of Payments is in surplus of Rs 3 billion. 4
BUDGET OUTLOOK
Forecasting growth rate of 4 percent, (same growth rate of World GDP).
Revenue of Rs 76.9 billion will be raised of which:
• 16.4 billion from income taxes
• 44.4 billion from indirect taxes
• 3.4 billion from grants and other budget support
• Expenditure will amount to Rs 90.5 billion. The budget deficit for 2012 will be maintained at 3.8 % of GDP
• Public sector debt to GDP reduced to 54.1 % in 2012
e-Budget Brief 2012 / November 2011

5. ENHANCING PROMOTION CAPACITY
• More focus and more carefully thought out promotional campaigns to be run in India, China and Africa
• BOI to further develop the financial sector, ICT/BPO and the education and medical hubs
• BOI to facilitate inward investment
INVESTMENT FACILITATION
• Setting up of Joint Public-Private Sector Business Facilitation Task Force
Remove remaining bottlenecks to investment and exports
Simplify regulations
Save time for applicants
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• New system to cut the time for registering property from 15 to 2 days
Abolish numerous import permits
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Enable Permanent Residence holders to purchase an apartment
OPENING MORE ECONOMIC SPACE
• Government to disinvest from commercial and industrial assets
REFORMING INSTITUTIONS
• Experts from Singapore to review water and waste water sectors
• Assistance from Singapore to review organisation and functioning of MTPA
• Transformation of DBM into a Micro, Small and Medium Enterprise Bank
• MK strategic review as country opens air access
e-Budget Brief 2012 / November 2011

6. • IFC assisting government in identifying Strategic Partner for Cargo Handling Operations
• New airport terminal being built and operated under management contract with Aéroports de Paris
• Merging cess-financed institutions
• Office of Public Sector Governance to assist public enterprises to improve governance, efficiency, services and cut waste
• Improve access to public services, government offices to open on Saturdays
CONSOLIDATING AGRICULTURE
• Sugar Insurance Fund Board granting 70 % discount on premiums due for 2011
• SIFB new policies to bring further drastic cuts in premiums
• 80 % advance to sugar planters on crops sent to mill
• Rs. 310 m on programme of re-grouping small planters, de-rocking and providing irrigation
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NEW ERA OF AGRI-TECHNOLOGY AND BIO FUEL
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• Framework to enable production of ethanol for blending
• Stakeholders of sugar industry to hold 35% of equity in ethanol company
NON-SUGAR AGRICULTURE
• Agricultural Marketing Board to finance seed purchases
• Improve market intelligence to farmers
• Increasing budget for food security to Rs. 150 million
• New freight rebate scheme involving a 25% cost-subsidy element
• Fair Trade certification to all sectors of the economy
e-Budget Brief 2012 / November 2011

7. FINANCIAL SERVICES
• Legislation to promote Limited Partnerships already passed
• Legal framework to promote Foundations, Private Occupational Pensions, New concepts of Trusts to widen spectrum of
financial vehicles
• Protect country’s best interest to India/ Mauritius Double Taxation Avoidance Agreement
• “Code Civil Mauricien” amended to govern leasing of both immovable and movable property, especially finance leasing
• Insurance sector abrogating legislation to allow local assets to be insured abroad
TOURISM
• Official rating system to be developed by Tourism Authority
• Introduction of Voluntary Green Certification
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• Rs. 25 m to Tourism Authority for cleaning and embellishment programme
• Rs. 13.5 m to MSPCA for control of stray dogs
• Intensify promotion campaigns in traditional markets and exploit potential of new markets
• Medical tourism to attract more visitors
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PUSH TO EMERGING SECTORS
• Second undersea fibre optic cable, LION 2 - operational by mid 2012
• Long distance telecom operators right of access to connect to international gateways via two landing stations
• ICT Act to be amended to promote competition
• Occupation permits to workers in ICT/BPO earning more than Rs. 30,000
KNOWLEDGE CENTRE OF EXCELLENCE
• Foreign students allowed to work on part-time basis for up to 20 hours/week except in security sector
• SLDC to reserve land in Réduit for campuses of renowned foreign tertiary education institutions
e-Budget Brief 2012 / November 2011

8. FRAMEWORK FOR NEW-HIGH VALUE-ADDED INDUSTRIES
• Setting regulatory framework for Marinas and hinterland development
• Encourage setting up of film industry. Government to contribute 25% on agreed expenses incurred in Mauritius
MATCHING SKILLS WITH REQUIREMENTS OF THE ECONOMY
• Introducing Sponsored Pre-job Training Initiative
• Legal amendments to ensure pensions and associated benefits fully portable
SUPPORTING SMEs
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• Banking sector to release Rs 3 billion in terms of new overdrafts and bank loans at 3% above the repo rate, i.e, 8.5%
• New loans to SMEs at the DBM capped at the repo rate plus 3%, i.e, 8.5%
• Government abolishing inscription fee leviable on registered loans 8
MORE INDUSTRIAL SPACE AT LOWER COST FOR SMEs
• Construction of additional 175 units in industrial estates at five sites
• 50% discount on rental in first three years
DEMOCRATISING ENTERPRENEURSHIP
• Rs 20,000 monthly grant to cover living expenses of the entrepreneur in first year of operation of an innovative proposal
approved by the Mauritius Business Growth Scheme (MBGS)
e-Budget Brief 2012 / November 2011

9. STEERING THE COUNTRY SAFELY THROUGH THE CRISIS
Resilience Plan for the next three year covering enterprises of all sizes, with special focus on SMEs, infrastructure development and
job creation.
• Strategy one: Supporting enterprises at microeconomic level
Rs 7.3 billion to a National Resilience Fund (NRF)
Resources from NRF to broaden reach of the Leasing for Equipment Modernisation Schemes (LEMS)
All facilities under the LEMS extended to December 2014
• Strategy two: More government spending on infrastructure
Rs 21.2 billion for key infrastructure projects
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Rs 1.5 billion of the planned amount for approved and not yet ready for execution projects
• Strategy three: Financial system stability
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IMF recommendations on well-coordinated watch on the stability of the financial system
• Strategy four: Coherent macroeconomic response
Necessary mechanism for determining, with the Bank of Mauritius the accepted range of the rate of inflation. Monetary
Policy Committee to decide on how to keep inflation within agreed range
SHARING PROSPERITY WITH ALL
• Increase of wage compensation of 6.6 % to 11.5 % to workers in low wage bracket
• Monthly Basic Return Pension - Rs 3,350 for pensioners (60 to 89 years), Rs 9,975 (90 to 99 years) and Rs 11,320 for centenarians
• Earners up to Rs 3,000 a month - Government will now pay their share of the contribution to the National Pension Fund as
well as pay their share of the Transitional Unemployment Benefit
e-Budget Brief 2012 / November 2011

10. DECENT HOUSING UNITS FOR EVERY FAMILY
• Rs 200 per housing, per month for syndic in all NHDC estates, except for the three middle-income ones
• Rehabilitate wastewater disposal system of housing estates
• Rehabilitate water supply on 15 NHDC estates
• Waterproofing works in housing estates at Rose Belle and Palma
• Setting up of not-for profit Housing Development Trusts
• NHDC to construct 1000 units on 160 arpents under the Prime Minister’s deal with the sugar industry
• Rs 1.5 billion to Social Housing Development Fund
HEALTH IS WEALTH
• Grant under the Overseas Treatment Scheme from Rs 200,000 to Rs 500,000
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• Rs 51 million allocated to rehabilitation of alcoholics and drug addicts
• Prevention of Non-Communicable Diseases (NCDs)
• Employees to be allowed to use their monthly NSF contributions as payment of private health insurance
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SHAPING THE EDUCATION, TRAINNING AND SKILLING FOR THE 21ST CENTURY
• Increase in grant in aid to Special Education Needs schools by 25%
• Pre-primary education grant to cover 3 year olds
• Funding of crèches facilities for poor families, Rs 1,500 per month for a child up to 3 years old
• Companies to use their CSR fund to provide free of charge, crèche and kindergarten facilities for employees earning less
than Rs 12,000 per month
• Child-minding services after school hours in public pre-primary and primary schools
• 6 new children shelters to be opened
• Summer School Programme in schools where less than half the students passed the CPE
• Extension of the pre-vocational education programme to age 16
• Rs 500,000 to each Government school for renovation and upgrading
• Open School Programme extended
e-Budget Brief 2012 / November 2011

11. SPORTS AND LEISURE
• Extension of Trust Fund for Excellence in Sports programme to 250 athletes and 12 disciplines
• Rs 4.5 million for six scholarships annually to train overseas
• Rs12.5m Trust Fund for Excellence in sports
• Set up of the Mauritius Schools Football League for inter-school tournaments
• Companies be allowed to pay 50 percent of their high level athletes wages through their CSR fund
BOLSTERING THE JUSTICE SYSTEM
• Maximum monthly income limit for entitlement to legal aid - Rs 10,000
• Amendment of The Bail Act to allow for use of electronic bracelets
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• Consolidation of 12 Appeal Tribunals into 3
• Recruitment of 800 police officers
• Purchase of equipment worth Rs1.4 billion for the Police over 3 years including CCTV
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LOCAL AUTHORITIES
• Rs107 million for 3 additional district councils
• Submarine fibre cable to link Rodrigues to Mauritius costing Rs 600 million. Financing provided by the Government
reimbursable over twenty years
• Grant to Rodrigues Regional Assembly - Rs 1.649 billion
• Airfares to Rodrigues subsidised until end of December 2012
• Provision of residential accommodation for families of Rodriguan patients coming to Mauritius for treatment
e-Budget Brief 2012 / November 2011

12. SUSTAINABLE DEVELOPMENT: LOOKING TO THE FUTURE
• Allocation of Rs 318 million to the MID initiative:
• Scheme to purchase of electricity from Small Independent Power Producers from 2 megawatts to 3 megawatts
• Composting of solid waste from 90,000 to 190,000 tonnes a year
• Rs 468 million to replace 145 kilometres of water pipes
• Rs 1.4 billion to connect 5,000 additional houses to the public sewer system
• Rs 95 million to address environmental degradation
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• Billboards fee between Rs 30,000 and Rs 70,000 per annum
SAFETY ON ROADS AND IN LAGOONS 12
• Rs 76m for 25 more speed cameras
SOUND AND RESPONSIBLE FISCAL STEWARDSHIP
• Annual rental values for industrial leases of state land updated to reflect current market values, subject to a maximum of 40%
• SMEs grant to finance participation in international fairs to a maximum of Rs 100,000 per year
• Employees Welfare Fund and Tourism Employees Welfare Fund to advance loans of up to Rs 50,000 at 8.5% for up to 5 years
e-Budget Brief 2012 / November 2011

13. INCOME TAX
• Freeport
Income tax exemption for freeport operators which was valid until 2013 will continue for an indefinite period.
• Global Business
A protected cell company will have to pay tax on a cell basis
Payment of tax will be allowed to be made in Singapore dollar, South African rand, Swiss franc and any other approved
convertible foreign currency
Domestic companies will also be allowed to pay tax in the foreign currencies as they are reporting in their financial
statements
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• Solidarity levy on telephony service providers
Providers of fixed and mobile telephony services will continue to be liable to the solidarity levy at the rate of 5% of their
book profit and 1.5% of their turnover for one more year up to 2013. 13
• Solidarity levy on Global business management companies
Management companies in the global business sector will be liable to the solidarity levy at the rate of 10% of their
chargeable income for 2 years ending in 2013.
• Bad debts
Banks will be allowed to claim as a deduction debts due by SMEs written off as bad without having recourse to the courts.
• Overseas marketing and promotional expenses
The double deduction for marketing and promotional expenses granted to companies in the tourism sector or engaged
in export activities will be abolished as from 1 January 2012. However, SMEs will be provided with an annual grant not
exceeding Rs.100,000 to finance their participation in international fairs.
e-Budget Brief 2012 / November 2011

14. • Advance Payment System
Companies having a turnover not exceeding Rs.2 million annually will not have to file APS returns.
• Tax paid in excess
Excess tax paid by a company will be set off against future tax payable under the Advance Payment System.
• CSR
The basis of computation will be 2% of chargeable income instead of 2% of book profits.
• Income exemption threshold
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e-Budget Brief 2012 / November 2011

15. • Fringe benefits
The monetary values of fringe benefits which were last revised in January 2007 are being increased as follows:
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e-Budget Brief 2012 / November 2011

16. • Solidarity Income Tax
Solidarity income tax introduced last year on dividends received from resident companies or cooperative societies and on
interest on bank deposits earned by individuals whose total income exceeds Rs.2 million in an income year is abolished as
from 1 January 2012.
• Current Payment System
The self-employed having a turnover or deriving income from profession, vocation or occupation not exceeding Rs.2 million
per annum will no longer be required to file CPS returns and pay tax quarterly. This will also apply to rental income not
exceeding Rs.2 million annually. In addition, individuals who did not pay tax in the previous year will not be required to
submit CPS returns.
• Directors fees
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It is clarified that directors’ fees are taxable on an accruals basis.
• Filing of return by individuals 16
Individuals having an annual total income exceeding Rs.2 million will be required to submit their annual return electronically.
• Tax on gains from sale of immovable property
Tax on gains from sale or transfer of immovable property is abolished on transactions carried out as from 5 November 2011,
however, gains on the sale or transfer of immovable property in the normal course of business will continue to be subject to
income tax.
• Tax Deducted At Source
Tax deduction at source from interest payable on deposits will be abolished as from 1 January 2012. On the other hand, tax
deduction at source will be extended as follows:
In respect of contractors and sub-contractors, to cover other works such as mechanical and electrical works
e-Budget Brief 2012 / November 2011

17. To all payments made to non-residents for services performed in Mauritius except where such persons are exempted from
tax under a double taxation avoidance agreement
To interest paid by persons other than financial institutions and companies in the Global Business sector to non-residents
To cover rent collected by a tour operator or other intermediary on behalf of property owners
Ministries, Departments, Local Authorities, the Rodrigues Regional Assembly and Parastatals will be required to effect
deduction at source in respect of high-value contracts relating to implementation of projects and procurement of goods
and services.
The Mauritius Revenue Authority will be allowed to raise assessment on persons not withholding tax or not remitting the tax
withheld to the MRA.
• Collection of Tax Arrears
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A last opportunity is being granted to taxpayers to regularise their tax affairs during the period January to June 2012 for
any under declared or undeclared income in the past. Different schemes will be set up as follows:
Voluntary Disclosure of Income Arrangement (VDIA) 17
The VDIA will be operated by MRA from January to June 2012 and no penalties will be payable on income declared under
the scheme. In addition, no interest will apply if the tax is paid before 30 June 2012.
Incentive Scheme for VAT registration
This will be introduced to target persons in business, service providers and professionals who have not registered
themselves for VAT. They will have to pay VAT due only for the last 2 years prior to the date of registration after
deduction of input tax thereon and no penalty will apply. Interest will not apply if the VAT is paid before 30 June 2012.
Tax Arrears Settlement Scheme (TASS)
This Scheme will operate until end of June 2012 and will target recovery of long outstanding arrears, prior to 1 July 2006,
through full waiver of collecting penalties and 75% waiver of assessing penalties.
e-Budget Brief 2012 / November 2011

18. Expeditious Dispute Resolution of Tax (EDRT)
This will target settlement of tax debts by reviewing the amount of tax assessed where a taxpayer was unable to dispute
the tax claim due to failure to pay the 30% of tax assessed on objection, non-production of full records or non-attendance.
Penalties will be waived.
VALUE ADDED TAX
• Refund of VAT
Small registered planters, horticulturists, apiculturists and breeders will be refunded VAT paid in 2012 on the purchase of
agricultural machinery, equipment and tools
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Fishermen grouped in cooperatives on purchase of semi-industrial fishing vessels
Registered fishermen on purchase of VHF radios, fishing gear, outboard and inboard engines of up to 25 hp
• Exemption from VAT
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Anti-smoking gums
Life-jackets
Cosmetic surgery
Social housing projects set up by not-for-profit Housing Development Trusts
e-Budget Brief 2012 / November 2011

19. CUSTOMS AND EXCISE DUTY
The duty concession enjoyed by tour operators and car hire companies on purchase of limousine-type motor cars is being removed.
Changes in rates of customs and excise duty as from 5 November 2011
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e-Budget Brief 2012 / November 2011

20. Changes in customs and excise duty as from 5 November 2011
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LAND CONVERSION
• Exemption for land used by not-for-profit Housing Development Trusts for social housing projects
• Payment will be allowed in 4 consecutive equal 6-monthly instalments. The first instalment will be due at the time the
author isation is granted and the remaining instalments will have to be secured by way of a bank guarantee or an inscription
being taken on the land
e-Budget Brief 2012 / November 2011

21. REGISTRATION DUTY
• Registration duty will be removed on loans not exceeding Rs.1 million
• Exemption for social housing projects set up by not-for-profit Housing Development Trusts
• Exemption for purchase of a unit costing less than Rs.2.5 million in a housing estate of at least 5 units under a scheme
registered before 31 December 2013
• Donation duty will be reduced to 5% to align with registration duty
LAND TRANSFER TAX
• Exemption from payment
Financial institutions on the sale of immovable property acquired in the previous 12 months `in relation to debt recovery
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Not-for-profit Housing Development Trusts that has set up social housing projects
Housing projects of at least 5 units where the selling price does not exceed Rs.2.5 million per unit under a scheme registered
before 31 December 2013
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INDUSTRIAL LEASE ON STATE LANDS
The annual rental value per arpent of industrial leases of State lands along the coast are being increased as from 5 November 2011 as
follows:
e-Budget Brief 2012 / November 2011

22. ENVIRONMENT PROTECTION FEE
• Hotels, guest houses and tourist residences not profitable in 2012 will not have to pay the Environment Protection Fee. The
fee will be payable within 4 months after the end of the accounting year instead of monthly
NATIONAL PENSION FUND
• Government will pay the employee share to the National Pension Fund for those earning up to Rs.3,000 monthly. The same
measure applies for contribution to the Transitional Unemployment Benefit
NATIONAL SAVINGS FUND
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• Employees will be able to use their monthly contributions to pay for private health insurance
TENANT’S TAX 22
• This tax payable to Municipalities by tenants on the rental of commercial properties will be abolished as from 1 January 2012
ADVERTISING STRUCTURE (BILLBOARD) FEE
• As from 1 January 2012, the annual Advertising Structure Fee will be between Rs.30,000 and Rs.70,000 and will be collected by
the Mauritius Revenue Authority instead of the local authorities
LEVY ON MESSAGING SERVICES
• As from 1 January 2012, a levy of 10 cents will be payable on each SMS, MMS and ZMS sent
e-Budget Brief 2012 / November 2011

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and forms part of the international BDO network of independent member firms.
BDO is the brand name for the BDO network and for each of the BDO Member Firms.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The
publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information
contained therein without obtaining specific professional advice. Please contact BDO & Co to discuss these matters in the context of
your particular circumstances. BDO & Co, its partners, employees and agents do not accept or assume any liability or duty of care for
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any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based
on it.
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e-Budget Brief 2012 / November 2011