“Growth for the greater good and seizing all opportunities to create more wealth for our country and a better life for all our citizens”, this in the words of the Vice-Prime Minister and Minister of Finance and Economic Development, Mr Xavier Luc Duval, is the underlying the philosophy of the 2012 budget. The budget was presented to the National Assembly on 4 November.
The budget outlines an intensive approach for export promotion and market development. Besides promoting the opening of the economy it also makes bold adjustments to tax policy which promotes rather than inhibits growth and social justice. The budget announces institutional reforms to further embed efficiency and good governance.
The economy is forecast to register a growth rate of 4 percent. The budget will raise revenue of Rs 76.9 billion of which Rs 16.4 billion from income taxes, Rs 44.4 billion from indirect taxes, and Rs 3.4 billion rupees from grants and other budget support.
Expenditure will amount to Rs 90.5 billion and as a result, the budget deficit for 2012 will be 3.8 percent of GDP. Government is reducing the public sector debt to GDP ratio to 54.1 percent in 2012 and is well on course to the 50 percent debt to GDP objective set in the law and to be achieved by 2018.
In a bid to boost Mauritius as a quality destination for foreign direct investment aggressive campaigns will be held in traditional markets in Europe and the USA. More focused promotion campaigns are scheduled in India, China, and Africa, where the potential is unfolding at a rapid pace.
As regard the internationalization of the economy two roving ambassadors will be appointed for Africa and the Indian Ocean. They will assist in widening the network of Double Taxation Avoidance Agreements and Investment Promotion and Protection Agreements with African states.
The budget makes provision to broaden the scope for investment at home by Government disinvesting from some of its commercial and industrial assets. The aim is three-fold: make better use of Government assets to generate wealth and employment, raise revenue to invest in new strategic sectors, and offer better facilities to the public.
A Resilience Plan has been designed for the next three years covering enterprises of all sizes with special focus on SMEs, infrastructure development and job creation. It is made up of four strategies: support enterprises at the microeconomic level; investments of Rs 21.2 billion for key infrastructure projects; further build up the stability of our financial system; and setting up of a necessary mechanism for determining, with the Bank of Mauritius, the accepted range of the rate of inflation.
“This is a Budget about making things happen. It is a credible plan to fight exclusion, combat absolute poverty, democratise the economy, create more jobs, bolster the confidence of businesses and set a strong base for sustainable development”, said Mr Xavier Duval.
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