Following the 2019/20 budget speech of the Prime Minister and Minister of Finance and Economic Development, Honourable Pravind Jugnauth, his last one before the general elections, our team has analysed the measures that he announced.
Following the enactment of the Finance (Miscellaneous Provisions) Act 2018 (“FA 2018”) and in line with the Organisation for Economic Co-operation and Development (“OECD”) recommendations, the Financial Services Commission (“FSC”) has provided indicative guidelines, in the form of Circular Letter CL1-121018, for substance requirement for the different legal entities composing the new global business framework.
In an increasingly global economy, the Mauritian government wishes to safeguard its position as a reputable jurisdiction for doing local and international business. It has therefore committed to implementing some of the Base Erosion and Profit Shifting ('BEPS') recommendations set out by the Organisation for Economic Co-operation and Development ('OECD'). These measures are set out in the Finance (Miscellaneous Provisions) Act 2018 (‘FA2018’) and aim at harmonizing the existing provisions of business licensing to conform to international standards.
Going into the game
As World Cup 2018 takes centre stage, the Prime Minister, and Minister of Finance and Economic Development, Honourable, Pravind Jugnauth stoically delivered his third budget speech during the life of this parliament. More importantly though, his penultimate one before the country goes to the polls. The economic bet based on substantial governmental spending on infrastructure projects is yet to fully deliver on its promises of economic growth. In addition, the structural and sectoral challenges have been amplified by exogenous factors with oil price rebounding to 2014 levels, the unfolding of the OECD measures in terms of information disclosure and tax harmonisation, and the generally volatile global capital markets amidst state-centred politics and global power shifts.
Over the last few months the private sector and the Government have devoted a significant amount of time and resources to debating the future of the financial services sector and the integration of the global business with the domestic economy, in line with the country’s commitment to the OECD measures on Base Erosion and Profit Shifting. A key component of that integration is the harmonization of the taxation policy between the two regimes.
In that respect, this budget now provides certainty on the relevant fiscal regime going forward.
Safyr Utilis is pleased to provide you with our Tax Note on the changes which will be brought to the Convention between the Government of Mauritius and the Government of the Republic of India for the avoidance of double taxation, following the issue of a Regulation by the Government of Mauritius on 23 July 2016.
This is the first budget of the Minister of Finance and Economic Development, Honorable Pravind Kumar Jugnauth against a backdrop of economic uncertainty with global growth forecast being revised downward almost on a quarterly basis and the far reaching ramifications of Brexit a long way from being unravelled.