The difference in taxation of foreign residents and Mauritian residents in the case of the Solidarity Levy is a first for the country

A multitude of measures were announced in the budget which puts a strong focus on social affairs to, amongst other things, try to protect the purchasing power of the middle class.


The agenda includes some attractive incentives, namely to promote better food self-sufficiency, and other positive measures to protect the "Made in Moris" label and Mauritian businesses in general.


What is however a first, is the difference in taxation of foreign residents and Mauritian residents - indeed, the latter are the only ones subject to the 25% "Solidarity Levy", which should increase the applicable tax rate to 40% for those whose income exceeds 3 million rupees. Such heavy taxation could cause some HNW Mauritians to reconsider their investment in Mauritius - and this could have an adverse effect on the economy in the long term. One can only hope that this "Solidarity Levy" is only temporary and will disappear when the pandemic ends.


Moreover, new "thresholds" to re-energize the movement of foreigners into Mauritius, whether it be professionals, entrepreneurs, investors or retirees, should help boost consumption and support development.


Another novelty in the budget is the redesign of the pension system and the abolishment of the NPF, with a reduced contribution from low earners but the removal of a ceiling for high earners. If this contribution helps taxpayers increase their pension proportionately according to contribution, then it will not be perceived as an additional burden, but information regarding the particulars of this new system is yet to be communicated.


Finally, provisions were made for significant investment capital in this budget, which thanks to the Covid fund, manages to be in balance this year. These expenses will probably help the Mauritian economy get through this difficult year marked by confinement and global recession. It is our hope that the State manages to implement these measures as efficiently as possible, avoiding any waste so that the whole of Mauritius and its people may benefit.