The Budget Speech 2020-2021 was delivered yesterday by the Minister of Finance, Economic Planning and Development, Dr the Hon Renganaden Padayachy. With this budget, titled “Our New Normal The Economy of Life,” the Government aims to:
- Preserve jobs and livelihoods for the most vulnerable of our society
- Rebuild our Economy
- Ensure an inclusive, robust and sustainable economic development together.
We’ve read it all and summed up the highlights for entrepreneurs and SMEs! It’s all there👇
💡 Setting up the right ecosystem for entrepreneurs
“Our recovery and the future growth will be built on a strong commitment towards an inclusive economy,” said the Minister. One that supports entrepreneurship, creativity and ideas and sets up “the right ecosystem to allow entrepreneurs from here and elsewhere to turn their ideas into creation.”
But how so, you ask? Here goes!
- The Development Bank of Mauritius (DBM) has earmarked Rs 10 billion to support the “distressed” SME sector
- The DBM will also provide loans of up to Rs 10 million per enterprise at a concessional rate of 0.5% p.a.
- For women entrepreneurs, the DBM will provide Rs 200 million for loans at a concessional rate of 0.5% p.a.
- To ease cash flow, the Government will encourage the broadening of access to factoring facilities through Maubank
- The ISP Ltd will subsidise 50% of the factoring fee per invoice for SMEs.
- The Procurement Policy Office will require Public Bodies to procure specific goods and services from SMEs only
- Public Bodies will pay SMEs within 14 days from the date of invoices in respect of supply of goods and services
- SMEs and cooperative societies will benefit from a grant of 15% on cost of assets of up to a maximum of Rs 150,000 under the DBM Enterprise Modernisation Scheme
🇲🇺 Supporting the Made in Mauritius
- Fostering a Buy Mauritian program favouring local entrepreneurship and industrial development
- The Budget will provide for a Margin of Preference of 20% on public purchases to all local manufacturing companies and of 30% on public purchases for manufacturing SMEs
- To encourage local production, the Ministry will be increasing the one-off grant towards certification under ‘Made in Moris’ label from Rs 5,000 to a maximum of Rs 50,000
- SMEs holding the ‘Made in Moris’ label will benefit from a Margin of Preference of 40% instead of 30% under Public Procurement
- A dedicated Venture Capital Market will be set up at the Stock Exchange of Mauritius for start-ups and SMEs
💰 A new pension system?
There will be no more contributions to the National Pension Fund, as the Government favours a new pension system “which is fair, equitable and sustainable for our economy.”
Introducing the Contribution Sociale Géneralisée (CSG)
The CSG, a “contributory, participative and collective system,” will be effective as from September 2020.
The new system in three main points:
- Employees earning up to Rs 50,000 will contribute 1.5%, while their employers will have to contribute 3%
- Employees earning more than Rs 50,000 will contribute 3%, while their employers will have to contribute 6%
- The self-employed will also be included in the new system
🧾 Introducing a levy on companies
At the beginning of this budget speech on Corporate Tax , The Minister called upon the “solidarity of our most successful economic operators to contribute towards building resilience.”
This section of the budget includes the introduction of a levy on companies:
- It will concern companies having gross income exceeding Rs 500 million in an accounting year; or those part of a group of companies where the gross income of the group exceeds Rs 500 million
- A rate of 0.3% will be applied for insurance companies, financial institutions, service providers and property holding companies
- A rate of 0.1% will be applied for other companies
- It will not apply to companies in the tourism sector, nor to companies with a Global Business License
So there you go!
If you want to read the full Budget Speech, head over here 👈