Mauritius Finance (Miscellaneous Provisions) Act 2020 – Key legal highlights

Highlights of the Finance (Miscellaneous Provisions) Act 2020

The Finance (Miscellaneous Provisions) Act 2020 (the Finance Act 2020) was gazetted on 07 August 2020 to implement the measures announced in the National Budget presented by the Minister of Finance and Economic Development on 4 June 2020. This highlight sets out the main changes proposed to the tax and corporate legislations which are relevant to the Global Business sector in Mauritius.

The Financial Services Act

  • Moneylenders will now be licensed by the Financial Services Commission (FSC) instead of the Bank of Mauritius (“BoM”) as was the case previously. The FSC has also been empowered to license and regulate Peer-to-Peer Lending Platforms. New rules have been recently issued on Peer-to-Peer Lending Platform by the FSC. 
  • Amendments have been made to provide for prior notice of not less than 30 days to be given to the FSC when a licensee holding a financial services licence wishes to surrender its licence to the FSC and to provide a timeframe to licensees for a proper transfer of business operations to another licencee.
  • The FSC has been empowered to extend the timeline for filing of financial statements during a curfew period or situation of emergency or natural disasters.
  • Amendments have been made to enable the FSC to provide exemptions for filing of annual financial statements where the FSC is of the opinion that it is not applicable to a person or class of persons.
  • An auditor shall have an obligation to report to the FSC if during the course of its audit of a Global Business Company or any licensee of the FSC, it becomes aware of any matter which gives the auditor reasonable ground to believe that the licensee has contravened any law, has committed or likely to commit a financial crime or serious irregularities have occurred or the licensee’s ability to continue as a going concern has been jeopardised.

The Companies Act

  • The Board of directors of a public company will be required to include at least two independent directors.

An independent director has been defined as a non-executive director who:

  • Is not an employee
  • Does not have material business relationship with the company either directly or as a partner, shareholder, director or senior employee of an organisation that has such relationship with the company
  • Does not receive remuneration from the company except remuneration or any other benefit given to him as a director
  • Is not a nominated director representing a substantial shareholder
  • Does not have close family ties with any of the advisors, directors or senior employees of the company
  • Does not have cross directorship or significant link with other directors through involvement in other companies or other organisations
  • Has not served on the Board for more than nine continuous years from the date of his first election
  • In addition to the existing duties in the Companies Act, a director will also be required to act in a manner which is not oppressive, unfairly discriminatory or unfairly prejudicial to shareholders.

The Economic Development Board Act

  • The Smart and Innovative Mauritius Development Scheme has been introduced. This scheme concerns projects in the fields of:
  • Additive manufacturing
  • Data economy
  • High tech farming and smart agriculture
  • Life sciences and biotechnology
  • Smart manufacturing and assembly of electric vehicles
  • Virtual economy
  • Technical education and training programmes in any of the above fields

Any person wishing to undertake projects in the above fields in Mauritius may make an application with the Economic Development Board (EDB). Guidelines are expected to be issued by the EDB on same. It is highly likely that incentives will be provided to investors investing in this scheme.

  • The Business Obstacle Alert Mechanism has been introduced to enable an enterprise to alert the EDB of any delays faced when applying for a licence which will enable the EDB to enquire about the issue, make recommendations and publish remedial action.
  • The Yacht Promotion Scheme has been introduced. Currently, super yachts can visit Mauritius on the condition of securing a series of approvals and permits required from different Government entities including berthing rights, immigration, customs, authorisation to conduct inland flights via onboard helicopters, access to other Mauritius dependencies and territories. This scheme would provide for streamlined procedures and licencing to facilitate access of yachts and their passengers to Mauritius catering for multiple berthing options, rights for helicopter flights and gaming among others. The EDB is currently working on the operationalisation of the scheme with a planned entry in operation in December 2020.

The Immigration Act

To make it more attractive for foreigners to reside and work in Mauritius, the following measures have been passed under the immigration laws:

  • The validity of a Permanent Residence Permit has been extended from 10 to 20 years.
  • A holder of an Occupation Permit (which allows a non-citizen to live and work in Mauritius) will be allowed to bring his/her parents to live in Mauritius as his dependents.
  • The validity of an Occupation Permit for an investor or self-employed non-citizen has been extended from three to 10 years as from the date of issue of the Occupation Permit.
  • Non-citizen who has been a holder of an Occupation Permit or a Residence Permit as retired non-citizen for 3 years will qualify for a Permanent Residence Permit provided that the eligibility criteria are met.
  • Non-citizens who have held an Occupation Permit or a Residence Permit for at least three years before 01 September 2020 may now apply for a Permanent Residence Permit.
  • The minimum investment required to obtain a Permanent Residence Permit for non-citizen investors, self-employed non-citizens, or retired non-citizens has been reduced from USD 500,000 to USD 375,000, subject to certain conditions.
  • Holders of Occupation Permits as professionals or holders of Residence Permits as a retired non-citizens may now invest in any business in Mauritius provided that they do not manage or work in the business and do not derive any salary or employment benefits from the business. Nevertheless, holders of Occupation Permits as professionals may hold shares in a business where they are employed provided that they are not majority shareholders in the company where they are employed.

The Non-Citizens (Employment Restriction) Act

The Non-Citizen (Employment Restriction) Act has been amended to provide that a non-citizen holder of a residence permit by virtue of an acquisition of property may take up employment without the need to apply separately for a work permit.

The Non-Citizens (Property Restriction) Act

The Non-Citizens (Property Restriction) Act has been amended to:

  • Allow non-citizens holding a Residence Permit, an Occupation Permit or a Permanent Residence Permit to acquire one plot of serviced land for residential purposes in Smart Cities. The Prime Minister can give his covering approval and validate the acquisition of a property by a non-citizen after the transfer has been made if he is satisfied of the credentials of the non-citizen and that omission to seek prior authorisation for the transaction was due to a mistake or oversight; and
  • Provide for a fine and an imprisonment term to a non-citizen who is in breach of the provisions of the Non-Citizens (Property Restriction) Act.

The Income Tax Act

Personal tax

  • Liability to Solidarity Levy – The solidarity levy rate applicable to resident individual employees will be increased from 5% to 25% on leviable income in excess of MUR 3 Million instead of MUR 3.5 Million as from 1 July 2020.

The maximum solidarity levy shall not exceed 10% of the aggregate of the net income excluding any lump sum by way of commutation of pension or by way of death gratuity or as consolidated compensation for death or injury but including dividends paid to an individual by a resident company and a cooperative society or the share of dividends of an individual in a resident société or succession. Where an employee derives emoluments exceeding MUR 230,769 in a month and has not submitted an employee declaration form, the employer shall withhold the solidarity levy on the amount in excess of MUR 230,769 at the rate of 25%, provided that the additional tax does not exceed 10 per cent of the total emoluments.

Effective date: 1 July 2020

  • Income Exemption Thresholds – The income exemption thresholds of individual residents will be increased as per the table below, in respect of income year 2020/2021. Effective date: 1 July 2020.
CategoryFrom (MUR)To (MUR)Increase (MUR)
Individual with no dependent310,000325,00015,000
Individual with one dependent420,000435,00015,000
Individual with two dependents500,000515,00015,000
Individual with three dependents550,000600,00050,000
Individual with four or more dependents600,000680,00080,000

Corporate tax

  • Income from life insurance business – The tax payable by a company deriving income from life insurance business shall be the higher of the normal tax payable or 10% of the relevant profit. Effective date: 1 July 2020
  • Solidarity Levy on Telephony service providers shall be calculated at the rate of 5% of the accounting profit and 1.5% of the turnover of the operator in respect of the year of assessment commencing on 1 July 2020 and in respect of every subsequent year of assessment.
  • Expenditure incurred on patents and franchises – Double tax deduction would be available to manufacturing companies on the acquisition cost of patents and franchises and for costs incurred to comply with international quality standards and norms. Where double deduction has been claimed, a company would not be entitled to annual allowance. Effective date: 1 July 2021
  • Capital expenditure on new plant and machinery – Where a manufacturing company incurs capital expenditure on new plant and machinery (excluding motor cars) during the period 1 June 2020 to 30 June 2023, it shall be allowed, in the year of acquisition and the two subsequent years, a tax credit of 15% of the cost of the new machinery. Effective date: 7 August 2020
  • Investment allowance – Provided that a company has been adversely affected by COVID-19 and where the company has, during the period 1 March 2020 to 30 June 2020, incurred capital expenditure on the acquisition of new plant and machinery (excluding a motor car), it shall be allowed a deduction of 100% of the capital expenditure so incurred by way of investment allowance in respect of the income year in which the expenditure is incurred, in addition to annual allowance which may be claimed. Effective date: 7 August 2020
  • Extension of time for payment of corporate income tax for companies operating in the tourism industry – Any company engaged in an activity in the tourism industry and (i) having an accounting period ending on any date during the period September 2019 to June 2020 or (ii) having to pay tax under the Advance Payment System during the calendar year 2020, shall pay the tax due in accordance with its annual return of income as follows – (a) half of the tax on or before 29 December 2020; and (b) the remainder on or before 28 June 2021. Effective date: 7 August 2020
  • Eight successive income years tax holidays granted in respect of:
  • Income derived from inland aquaculture in Mauritius, by a company which has started its operations on or after 4 June 2020
  • Income derived by a company which is among the Top 500 institutions worldwide setting up a branch campus in Mauritius which started its operations in Mauritius on or after 4 June 2020
  • Income derived from the manufacturing of nutraceutical products by a company which has started its operations on or after 4 June 2020 Effective date: 7 August 2020
  • Capital expenditure on electronic, high precision or automated machinery or equipment – Full deduction of the capital expenditure will be allowed to a person who incurred capital expenditure on electronic, high precision or automated machinery or equipment on or after 1 July 2020, in that income year, provided that no deduction is claimed by way of annual allowance. Effective date: 1 July 2021
  • The definition of manufacture has been extended to cover retreading of used tyres and recycling of waste to enable such activities to benefit from incentives granted to manufacturing companies.
  • Expenditure incurred on Medical research and development – Double tax deduction for a person who incurred expenditure on medical research and development in an income year provided the research and development is carried out in Mauritius and no deduction is claimed by way of annual allowance. No further deduction by way of annual allowance may be claimed by the Company. Effective date: 1 July 2021

Tax administration

  • Individuals are required to file their tax returns electronically not later than 15 October following that income year, in such form and manner as the Mauritius Revenue Authority (MRA) may determine.
  • A refund of any excess income shall be made within a period of 60 days of the due date for the submission of the return or the date of receipt of the claim, whichever is the later. Where the MRA requests for any documents or information in respect of the claim, the time limit of 60 days shall run from the date the MRA receives the information so requested. Effective date: 7 August 2020

The National Pensions Act

Introduction of the Contribution Sociale Genéralisée (CSG) and abolition of the National Pensions Fund (NPF)

After 31 August 2020, the National Pensions Fund which has formerly been the Fund from which pensions were paid to retired employees will cease to receive contributions. The Fund will be frozen, no person shall be an insured person for the purpose of the NPF. Every participant and every employer of a participant, as applicable, shall pay the CSG to the MRA. The rate of the CSG for an employer and employee have been prescribed by way of Regulations on 8 September 2020 and are as follows:

Participant earning remuneration < MUR 50,000Rate
Employee rate1.5%
Employer rate3%
Participant earning remuneration > MUR 50,000Rate
Employee rate3%
Employer rate6%

The CSG shall be payable in respect of the month of September 2020 and for every subsequent month. A penalty of 10% of any amount of CSG remaining unpaid and interest of 1% per month or part of month would be applicable for non-payment or late-payment of the CSG. No such penalty or interest would, however, be recoverable by an employer from an employee.

The Workers Right Act

  • The definition of discrimination at work has been amended to include ‘gender’ discrimination.
  • The definition of ‘basic wage or salary’ has been amended to exclude payment for overtime, any bonus or allowance, by whatever name called, paid over and above the wage or salary.
  • The end of year bonus of a worker irrespective of his annual salary used to be calculated based on his ‘earnings’ during the calendar year. Henceforth, only workers’ earning a monthly basic salary or wage of up to MUR 100,000 will have their end of year bonus calculated based on their ‘earnings’ (which include commission, productivity payment, etc.) during a calendar year. Workers earning a monthly basic wage or salary of more than MUR 100,000 will be entitled to a 13th month statutory bonus which shall not be less than one-twelfth of the monthly basic wage or salary payable in the month of December times the number of months worked in the year.


  • Digital Banking – To foster the development of digital banking, the Bank of Mauritius (BoM) will be allowed to issue a digital banking licence. The BoM will issue guidelines on the new licence.
  • Money lenders licence – The responsibility for the licenses, regulation and supervision of moneylenders has been transferred from the BoM to the FSC.
  • The BoM has been empowered to issue green bonds and blue bonds. The BoM may, by itself or through its subsidiary, or acting as agent of the Government pursuant to section 57 of the Bank of Mauritius Act, raise loans by the issue of securities for investment in projects or companies promoting the sustainable economic development of Mauritius, including the blue economy and green economy.
  • It is proposed to establish a Credit Scoring Services Agency for the purpose of providing credit scores on an applicant for credit on such terms and conditions as it may determine.

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