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May 21, 2020

Mauritius enacts legislation to mitigate impact of COVID-19

On 15 May 2020, the Mauritian National Assembly passed the COVID-19 (Miscellaneous Provisions) Act 2020. The Act amends 56 legal provisions, including amendments to the Bank of Mauritius Act, Companies Act, Consumer Protection (Price and Supplies Control) Act, Courts Act, Customs Act, Customs Tariff Act, Education Act, Financial Services Act, Income Tax Act, Insolvency Act, Interpretation and General Clauses Act, Mauritius Revenue Authority Act, National Pensions Act, Public Health Act, Registration Duty Act, Tourism Authority Act, Value Added Tax Act and Workers’ Rights Act. Most of the changes to the Income Tax Act are effective as from 23 March 2020. The changes made to the Value-Added Tax Act are effective as from 24 March 2020.

This Alert summarizes the key changes to the Income Tax Act and the Value-Added Tax Act.

Changes to the Income Tax Act

Contribution to COVID-19 Solidarity Fund: new section 27H


Contributions made to the COVID-19 Solidarity Fund during the fiscal years ending 30 June 2020 and 2021 qualify for deduction against the net income of an individual after deducting the Income Exemption Threshold, interest relief, medical or health insurance premium and deduction for household employees.

The amount of the deduction to the COVID-19 Solidarity Fund is unlimited. Any excess deduction may be utilized against the net income of the individual for the subsequent two years.


Contributions made to the COVID-19 Solidarity Fund during the fiscal years ending 30 June 2020 and 2021 qualify for deduction for companies.

A company may have a financial year end other than 30 June. The fact that the amendment on the deduction of the contribution has been cross referenced to the section for individuals may give rise to various interpretations. A strict application of the law would imply that the contribution that is deductible should be made during the years ending 30 June 2020 and 2021 only. If the interpretation is based on the year of assessment, then the outcome may be substantially different. Take the example of a company with a calendar year end, extrapolating the 30 June year end to the relevant year of assessment would imply that the contributions that would qualify for deduction may be made during the calendar years 2020 and 2021. It is expected that the law will be clarified regarding this provision.

The contribution may be restricted if the company has exempt income. Hence, it cannot be assumed that any contribution during the qualifying period would be wholly deductible.

COVID-19 levy

An employer who has benefited from an allowance under the Wage Assistance Scheme (WAS) may be subject to a levy. Depending on the level of its taxable profit, a company may have to effectively refund the aggregate amount of any WAS allowance through the levy. The levy is restricted to 15% of the taxable profit of the company. For the purpose of the levy, the taxable profit should exclude any tax loss brought forward.

A company with a tax loss during the year is not required to pay the levy. The WAS allowance would be considered as a subsidy in those cases. To determine the tax loss for the relevant year, the WAS allowance should be considered in the first instance.

The following depicts three scenarios to illustrate the mechanism of the levy.












Taxable profit for the year







Tax loss brought forward





Net taxable profit






Tax loss carried forward to next year




WAS allowance







Maximum levy


Taxable profit for the purposes of the levy







15% thereon







Amount of levy








Net financial benefit


WAS allowance





















The levy is payable at the time the company submits its annual tax return, though the WAS allowance may be granted for the months of March, April and May 2020 or any such other prescribed month.

There are various provisions on the powers of the Mauritius Revenue Authority (MRA), including the application of the various anti-avoidance provisions on the levy.

Wage Assistance Scheme

An eligible employee is an employee employed on a part-time or full-time basis by an employer earning gross income from a business. Employees employed by a charitable institution, by the MRA or registered under the Registration of Associations Act, charitable trust or charitable foundation are also considered as eligible employees. The law specifically provides that any other categories of employees may be prescribed by way of regulations. The monthly basic salary for the months of March, April and May 2020 or any other prescribed month, should not exceed Rs50,000.

The following categories of employees do not qualify for the WAS: an employee of a Ministry, a Government department, a local authority, a statutory body or the Rodrigues Regional assembly, or any employee employed by any prescribed employer or any such categories of employees that may be prescribed.

The allowance is computed as follows where the main business activities of the employer is in Mauritius:



Percentage of basic salary or wage %


Maximum allowance Rs

March 2020





April 2020





May 2020





For any other prescribed month, the portion of the allowance and maximum amount will be defined in the regulations.

There are various provisions on:

  1. The application process for the WAS allowance
  2. The manner the MRA is to respond to an application
  3. The WAS allowance for certain employees of an export manufacturing enterprise
  4. The powers of the MRA under certain circumstances, like the request for any information or document to assess the correctness of the information submitted in an application

Changes to the Value-Added Tax Act

New items in Fifth Schedule

The following are deemed to be zero-rated supplies:

  1. Protective masks against dust, odors and the like of H.S. Code 6307.90.30
  2. Other breathing appliances and gas masks, excluding protective masks having neither mechanical parts nor replaceable filters of H.S. Code 3808.94.10
  3. Hand sanitizers of H.S. Code 3808.94.10


For additional information with respect to this Alert, please contact the following:

Ernst & Young (Mauritius), Ebene
Ernst & Young Advisory Services (Pty) Ltd., Africa ITTS Leader, Johannesburg
Ernst & Young Société d’Avocats, Pan African Tax – Transfer Pricing Desk, Paris
Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London
Ernst & Young LLP (United States), Pan African Tax Desk, New York



The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


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