On 15 May 2020, the COVID-19 (Miscellaneous Provisions) Act, 2020 (the "COVID-19 Act") was adopted by Mauritian Parliament. This legislation notably amends the revenue laws in Mauritius to help both individuals and companies through the economic disruption caused by the COVID-19 pandemic. The major tax measures which have been brought into force by the COVID-19 Act are as follows:
Government has introduced a new COVID-19 Levy applicable for the years of assessment commencing on 1 July 2020, 1 July 2021 or 1 July 2022 for employers (individuals, sociétés and companies) who have benefited from the Government Wage Assistance Scheme (the "WAS"). The precise year of assessment that may be applicable to each company will depend on the accounting period applied by that company. The levy will be payable to the Mauritius Revenue Authority (the "MRA") and will only apply to employers who are liable to pay tax in the specified years of assessment.
The Levy will be the lower of the total amount received under the WAS or:
- for individuals: 15% of gross income after deductions of specified allowable expenditure;
- for sociétés and companies: 15% of the chargeable income for the purposes of the Levy.
To calculate the chargeable income for the purposes of the levy, the MRA will not consider unrelieved amount of losses carried forward from previous years of assessments.
Where an employer fails to pay the levy, the MRA may, within a period of three years from the date the Levy is payable, issue a claim to the employer requesting them to pay the levy, together with any penalty and interest applicable within 28 days from the date of the notice. The MRA will impose a penalty of 10% on any levy amount unpaid and an interest of 1% per month/part of the month the levy remains unpaid.
The ministry is empowered to exclude certain category of employers from the levy but no announcement to this effect has been made up to now.
Contribution to COVID-19 Solidarity Fund
As announced by the government after the setting up of the COVID-19 Solidarity Fund, individuals and companies will be able to deduct any amount contributed to the COVID-19 Solidarity Fund from their taxable income for the income tax return of September/October 2020 (for contributions made up to 30 June 2020) or September/October 2021 (for contributions made from 30 June 2020 to 31 December 2020). They will be entitled to carry forward any unrelieved deduction from their net income up to a maximum of two years.
As from 24 March 2020, the following items are going to be classified as zero-rated supplies:
- protective masks against dust, odours and the like;
- other breathing appliances and gas masks, excluding protective masks having neither mechanical parts nor replaceable filters; and
- hand sanitisers.
The COVID-19 period will mean the period:
- starting on 23 March 2020; and
- ending on 1 June 2020 or ending on such later date as the prime minister may, by regulations, prescribe.
For any tax payment under any revenue law due during the COVID-19 period, the payment must be made no later than 25 June 2020, otherwise the prescribed penalty and interest will apply.
Taxpayers can make written representation to the Assessment Review Committee (the "ARC") within 28 days of a decision under the Income Tax Act, Value Added Tax Act or Gambling Regulatory Authority Act. If the 28 day-delay relating to the proceedings before the ARC expires, or falls during:
- the COVID-19 period, the delay will start the after the COVID-19 period ends; or
- a period of 21 days after the COVID-19 period lapses, the delay will start 21 days after the COVID-19 period ends.
Where the delay imposed to make an assessment, a decision, a determination, a notice or a claim and the delay expires, or falls wholly or partly, during:
- the COVID-19 period: the assessment, decision, determination, notice or claim can be made or given within two months after the end of the COVID-19 period; or
- a period of 30 days after the COVID-19 period lapses: the assessment, decision, determination, notice or claim can be made or given within two months after the period of 30 days lapses.
The deadline for taxpayers to make an application for the review of assessment (raised before 1 July 2016 by the MRA) before the Expeditious Dispute Resolution Tax Scheme has been extended from 30 June 2020 to 31 August 2020.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.