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AfricaMoney | August 21, 2017

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MTPA seeks Rs 10

MTPA seeks Rs 10,000 increase in income exemption threshold

While seeking lower tax for individuals with a Rs 10,000 increase in the income exemption threshold, the MTPA has asked the government to tighten its grip over corporates.  (Image: 

Even as the Government of Mauritius calls for budget proposals, the Mauritius Tax Payers Association (MTPA) has requested for Rs 10,000 increase in the income exemption threshold across the board.

This would translate into a raised income threshold across all categories, with category ‘A’ (no dependents) benefiting from an income threshold of Rs 280,000 instead of the lower Rs 270,000, for category ‘B’ (one dependent) Rs 390,000 in place of Rs 380,000, for category ‘C’ (two dependents) Rs 450,000 instead of Rs 440,000 and for category ‘D’ (three dependents) Rs 490,000 instead of Rs 480,000. Those retired or disabled with no dependent (category E) would benefit from a raised income threshold of Rs 330,000 instead of Rs 320,000 while those in category F (retired or disabled with one dependent) would be liable to tax from Rs 440,000 instead of Rs 430,000.

Further, among other objectives of the MTPA memorandum for 2014, the document seeks to give a fillip to education. Accordingly, the MTPA has requested for additional exemption for dependent children pursuing undergraduate courses for Rs 100,000 in 2014 in place of the current Rs 80,000.

In addition, for those households where the dependent child is pursuing his undergraduate course overseas, the MTPA has requested additional exemption of Rs 150,000 for 2014, instead of the Rs 125,000 exemption at present.

Also, for both categories, while in 2013 the additional exemption was not allowed in respect of the same child for more than three years, the MTPA has now requested that the exemption be extended to five years.

The MTPA has also taken into consideration those who have incurred a housing loan or are seeking to buy a house. The association has requested that interest relief for first time buyers on secured housing loans (contracted on or after July 1, 2006) may be claimed up to Rs 120,000 per annum for 7 years in place of the current ceiling of 5 years.

However, even as it seeks tax exemptions for individuals, the MTPA has asked the government to tighten its grip over corporates.

The association considers that the 2013 budget’s proposal to exempt all enterprises with less than Rs 4 million turnover from registering under S15 of Value Added Tax (VAT) may not be appropriate. It comments that it is “well known” that enterprises do not fully declare their revenue/turnover. With this new budget incentive, enterprises with revenue/turnover of Rs 4.5 million will declare sales to be below Rs 4 million annually to evade VAT, the MTPA claims.

The MTPA further estimates that, following the tax incentive, about 1,500 enterprises have considered deregistration, with estimated losses in taxes of Rs 350 M. The MTPA reflects that this amount could have gone either to increase capital expenditure, or used to reduce public debts, standing at over Rs 204 billion, or to give further benefits to taxpayers, or to improve public transport.

Source: Mauritius Tax Payers Association Memorandum 2014

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