“Where’s the wow?” says Grant Thornton for lacklustre Mauritian Budget 2015-16
So, the million dollar question remains, in the words of Sattar Hajee Abdoula, CEO of Grant Thornton: Should we rejoice that this is a no-tax budget or have we already forked out enough through reduced purchasing power? (Image: Grant Thornton)
Widely expected to set Mauritius on the path of economic growth, the first budget of ‘l’Alliance Lepep’ was released yesterday, March 23, 2015, but failed to address concerns on how the ambitious growth plans are to be funded.
The finance minister recycled a number of measures which have delivered successful results in the past amongst which are tax holidays, incentives for Mauritian diaspora to come back and overseas trade representative offices. However, whether these will be sufficient to deliver the Minister’s ambitious growth plan remains to be seen.
Having said that, Mauritius Minister of Finance Vishnu Lutchmeenaraidoo should be commended for all the business facilitation measures aimed at boosting the growth of the small and medium enterprises in the short term.
Also, in the short term horizon, the devaluation of the rupee takes care of growth while low oil prices take care of resulting headline inflation. The short term growth prospect assumes spare capacity in the export sectors and higher demand from traditional customers.
Most of the other budgetary measures are expected to bring growth in the medium to long term, such as the creation of the 13 smart city projects and the new manpower training and direction initiative. Such measures will likely take a long time to bear fruit, hopefully before the end of the current government mandate.
Measures addressing mismatch between the skills of graduates and the demands of the market are long overdue and should resolve the alarmingly low employment rate amongst graduates.
The other three objectives of the budget, namely securing long term sustainable development, achieving greater social justice and promoting transparency and good governance strive to correct the perceived ‘wrongs’ currently prevailing and should bring more credibility to “Mauritius Incorporated” on the local and international scene.
The question which comes to mind further to the Minister’s no-tax comment is, inevitably: So, how is he financing it?
The depreciation of the rupee to the tune of some 17% over the last 2 months has ensured growth of Mauritius’ traditional export sectors and increased revenue to the government — with the money probably spent to fulfil electoral promises.
So, the million dollar question remains, in the words of Sattar Hajee Abdoula, CEO of Grant Thornton: Should we rejoice that this is a no-tax budget or have we already forked out enough through reduced purchasing power?
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