BUDGET ALERT :Continuing emphasis on the widening circle of opportunities

This is the second Budget of the Minister under the present Government. Unlike his first Budget, this Budget does not have any significant fiscal changes. This is no surprise to us as the last Budget was characterised by a series of well founded tax measures.  This Budget is structured towards the following: accelerating the technological transition; continuing to focus on our Africa strategy; supporting growth and create employment; strengthening health services; protecting the most vulnerable; and ensuring sound macro-economic management.  The focus is to consolidate booming industries, such as financial services, whilst at the same time giving a spur to the other pillars.  
The Budget also recognises various limitations in the regulatory framework in a number of instances and it is encouraging to note that the proposals made by the Minister are actually enacted.  However, it must be stressed that the enactment of the budget proposals are not enough on their own: it is their successful implementation and enforcement that count at the end of the day. In that respect it is important that all the stakeholders provide their comments on the amending laws as well as the practical aspect of any change: otherwise the benefits of the changes would not be felt.
A number of the measures are aimed at ensuring that Mauritius has a flexible manpower that can adapt itself to the volatile economic climate that has prevailed over the past few years.
The Minister did not raise the standard rate of VAT, but instead removed VAT on a number of items and adopted a number of measures aimed at decreasing the compliance obligations.  A number of changes were also made to enhance the fairness and transparency in customs administration.
We are disappointed to see that group relief has not been introduced in our direct tax system. The existing law is not fair as losses cannot be carried back and group relief is only available in the case of losses incurred by manufacturing companies once they are taken over or merged.  This argument is also supported by the fact that the Alternative Minimum Tax introduced by Finance Act 2005 is an additional tax and somewhat takes away the tax incentives introduced by Government.  
In summary, this is a Budget that builds on the policies and measures announced previously, with continuing emphasis on the widening circle of opportunities and recognising that investment into our people is key to the strive to make Mauritius globally competitive.  Substantial investment would be made into education.  Care is required in such a strategy as we should not aim to focus on quantity to the detriment of quality. The Budget consolidates on productive sectors, constructing new pillars and continues the policy of further opening up the economy by simplifying the procedures on doing business in Mauritius.