(Source: www.crs.co.za)
On Monday, 10 June 2019, the Prime Minister and Minister of Finance and Economic Development, Pravind Jugnauth, delivered the last Budget Speech of the present Government.
Key Highlights of the Budget Speech
The budget deficit is estimated to maintain course at 3.2% of GDP for financial year 2019/2020. Public Sector Debt to GDP has increased to 63% in 2018, and Government plans to reduce the debt to 60% before 2021 by using part of the undistributed surplus of the Bank of Mauritius. Real GDP has been increasing at an annual average rate of 3.7% since 2015 and is forecast to rise further to 3.9% in 2019 and 4.1% 2020.
The inflation rate and unemployment has decreased over the last years.
The tax legislation will be amended to introduce rules on controlled foreign companies (CFC).
Personal Income Tax Measures
Income exemption thresholds for all categories of taxpayers for the income year 2019-2020 are being increased as follows:
- For a taxpayer who has no dependent or one dependent, the threshold will increase by MUR5,000;
- For a taxpayer with two dependents, the threshold will increase by MUR20,000;
- For a taxpayer with three dependents, the threshold will increase by MUR25,000; and
- For a taxpayer who has four dependents, the threshold will increase by MUR45,000.
The additional deduction for a child pursuing tertiary studies and relief for medical insurance premium will now be available for a maximum of 4 dependents instead of 3 dependents.
The additional income tax exemption of MUR50,000 will be granted to a retired or disabled person having more than one dependent, instead of being restricted to those having one dependent only.
The annual net income subject to tax at a lower rate of 10% has been increased from MUR650,000 to MUR700,000.
In addition, an individual deriving a basic salary including compensation not exceeding MUR50,000 in his first month, will benefit from a tax credit of 5% of his chargeable income, provided that his annual net income does not exceed MUR700,000.
Solidarity levy not applicable to lump sum income received by a person as pension or death gratuity, effective retrospectively as from 1st July 2017. However, the levy will now apply on an individual’s share of dividend in a société (partnership) or succession.