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Mauritian budget 2022-2023: Salients points

14/06/2022
On Tuesday 7th of June 2022, the Mauritian Finance Minister delivered its budget speech for the year 2022/2023.  The 2022/2023 budget theme was: “WITH THE PEOPLE, FOR THE PEOPLE” as inspired from Joseph E. Stiglitz quote: “The only true and sustainable prosperity is shared prosperity.”
Building on the outcome of the 2021/2022 budget, the 2022/2023 budget is about:
  1. Strengthening the economic growth and resilience to future shocks
  2. Accelerating the transition to a sustainable and inclusive development model
  3. Investing in the people
 

KEY ECONOMIC INDICATORS

  • GDP will exceed its pre-pandemic level, reaching MUR520 billion by 2022 compared to MUR465 billion in 2021
  • Unemployment is expected to go down to 7.8 % from 9.1 % a year ago
  • Exports of goods and services will reach MUR169 billion from MUR141 billion in 2021
  • Investment rate will increase to 21.2 % from 19.2 %
  • FDI will exceed MUR20 billion from MUR 15.4 billion
  • Tourist arrivals will reach 1 million in 2022 compared to 179,780 in 2021
  • Public sector debt will be on a downward trend from 96.1 % in June 2021 to 87.4 % in June 2022
  • Government debt will fall from 87.1 % in June 2021 to 77.3 % in June 2022
  • Inflation rate is expected to be at 8.6% in 2022

With the theme: “WITH THE PEOPLE, FOR THE PEOPLE”, this year’s budget had a main focus on formulating socio-economic policies in view of strengthening economic growth and resilience to future shocks.  A “Maurice Stratégie” will be set up to increase jobs, higher skills, higher production, greater investment, lower inflation and lower debt.
 

FINANCIAL SERVICES – What should be retained.

The financial services industry has demonstrated strong resilience in the face of the crisis with a growth rate of 4.2 % last year.  Moving out of the FATF, EU and UK lists, the Mauritian government intends to build on this momentum and announced:
  • The Bank of Mauritius together with the Bank of China will launch a regional Renminbi Clearing Centre this year
  • The Bank of Mauritius will collaborate with the National Payments Corporation of India for the issuance of “RuPay” cards and Indian QR Code in Mauritius
  • A National payment card will be introduced
  • The FSC will revamp its framework to enable Re-Insurance companies to set up operations in Mauritius
  • To adapt its legislative framework to converge the domestic and the global regime
  • Introduction of a domestic minimum top-up tax to ensure that resident companies of large multinationals are taxed at a minimum rate of 15%
  • To cater for specialist trainings in the sector, the Financial Services Institute will become an awarding body
  • The BOM and the FSC will renew their one-year graduate training programme on AML, targeting 100 graduates
  • The Financial Crime Commission will be set-up to ensure an effective coordination in the fight against financial crimes.
 

AMENDMENTS TO ACTS:

        THE FINANCIAL SERVICES ACT
  • Will be amended to remove “Global Headquarters Administration”, “Global Shared Services” and “Global Treasury Activities” from the scope of “financial services”.
  • Will be amended to create a separate section for regulation of global activities in line with FATF requirements.
 
BANK OF MAURITIUS ACT
  • Will be amended to clarify that BOM may open accounts and accepts deposits from persons for the purpose of issuing digital currency
  • Will be amended to increase the functionalities of the Central KYC system and the Central Accounts Registry, with a view to facilitating collection, verification, validation and extraction of KYC records.
 
BANKING ACT
  • Will be amended to modify the criteria for the BOM to grant an in-principle approval in the context of an application for a banking license.  This will be issued to the applicant only if all the conditions imposed are fulfilled and all the required documents are submitted.
 
INSURANCE ACT
  • Will be amended to establish a framework for Structured Investment-Linked Insurance Business activities

SECURITIES ACT
  • Will be amended to also allow an Official Exchange to investigate for market abuse cases involving issuers on securities exchanges

VIRTUAL ASSET AND INITIAL TOKEN OFFERING SERVICES ACT
  • Will be amended to allow the FSC and investigatory authorities to make use of software/digital tools in carrying out supervision and investigation
  • Will be amended to allow information obtained by the FSC and investigatory authorities from such software/digital tools to be admissible as evidence for purposes of a criminal investigation, prosecution or other related criminal or civil court proceedings.

For more information, please contact: office@rosemont.mu