Budget 2016/2017 Budget:Aspiring accountants take an in-depth analysis

The BSP School of Accountancy and Management asked its students to undertake a critical analysis of the Budget as a means to improve the skills of those aspiring accountants. Sham Mathura, the director of BSP School, told News on Sunday that it was the first time that around a hundred students gathered at the BSP Tower in Port Louis together with school’s staff and staff of TGS Clark Robbins & Associates to study the Budget and make comments.

After having prepared a brief on the Budget, the youngsters gave their views on its content, followed by discussions. Their overall opinion is that the Budget fosters a wave of modern entrepreneurs with the suspension of trade fees for licenses of Rs 5,000 and below for a period of 3 years, extending the 8-year tax holiday, Rs 50 million to support and mentor young entrepreneurs through the National SME Incubator Scheme, NRF with SME partnership fund merged to create SME venture capital fund from Rs 150 million to Rs 500 million. 

Job opportunities 

The announcement of enlisting of 4,000 persons in technical skills, training of 1,000 young people in various sectors, provision of a monthly stipend of Rs 5,000 to trainees, the training of 1,200 seafarers for cruise jobs exempted from income tax, training of 200 engineers in public sector, provision of 2,000 jobs under the YEP and the filling of 7,200 vacancies in the civil service are good news for those who are preparing to get into the world of employment. However, they think that there should have been more initiatives to bridge the gap between academic studies and work placement. In Europe, they say, students at Form III level know already what career they are going to take while in Mauritius, youngsters are still clueless even after university. YEP alone will not solve the problem, they added.

Manufacturing

In order to help with the modernisation of the manufacturing sector, the setting off of 5 % of the investment of new plant & machinery against tax liability over a period of 3 years, that tax credit will be increased from 5 to 15 % for certain specific manufacturing products and the introduction of Airfreight rebate scheme. Brexit and the Chagos issue may impact on bilateral trade with Europe, two factors not mentioned in the Budget.

Agri-Business

The measures are: introduction of an agricultural management system to effectively manage abandoned sugar cane land, increase grant facility for sheltered farming from Rs 250,000 to Rs 400,000 to encourage planters to undertake agricultural activities, the setting up of a bio farming zone at Britannia, Rs 20 million to set up a bio technology institute, subsidies to be given on tea production activities and the announcement of the re-opening of Dubreuil tea factory, the setting up of a bio farming institute at Melrose and cash incentive of Rs 5,000 to farmers. “No measures are mentioned to reduce our dependence on imports of foodstuffs and how to produce more to reach self-sufficiency,” commented the students.

Financial Services

“Even though we got the guarantee that India will not do anything to upset the offshore sector of Mauritius, a note of caution should have been made if Singapore changes the Rule of the Game. For the time being, the changes announced in the Budget will keep attracting good FDI to our Offshore sector. On the other hand, we had hopes that the Minister would make his favourite announcement of making Mauritius a Duty Free island,” said the aspiring accountants in their observations.

Tourism 

• Promoting Mauritius in Africa and Gulf regions as duty free destination
• Positioning Mauritius as aviation hub in the region
• Exemption of admission charges by local authorities

 “Are we prepared to welcome more than One Million visitors per year? Do we have enough space and food to provide them? What should be done so that more tourists do not impact on our social set-up?” are the questions raised by the students.

Others 

• Few Incentives given to operators within the Film Industry
• Reduction in price of cooking gas from Rs 330 to Rs 270 for a 12 kg cylinder
• The Registrar General Department will be incorporated into the MRA to centralise revenue collection
• MRA will collect contributions for the National Pension Fund, the National Savings Fund, the HRDC training levy
• and the Workfare programme fund
• The focus of DBM will be micro enterprise financing

 “It is a good thing that many institutions will merge for better administration but still we believe that the DBM should have been under the umbrella of SMEDA. The Light Rail project has been revived. In making the metro getting through the Smart Cities may turn the latter into Duty Free hubs,” they recommended.

Blue Economy 

• Setting up of land and aquaculture and fish processing activity
• Purchase of a multi -purpose vessel for research, surveys and training of fishermen and skippers
• Grant to cooperative societies up to Rs 4m for the acquisition of semi- industrial vessels
• Introduction of 8 years tax holiday to industrial fishing companies operating in the seafood hub

 “No mention is made, however, of the exploitation of the ocean floor for nodules and minerals in view of our vast EEZ,” they added.

Energy/Green Economy

Creation of renewable energy company by CEB 

• Exemption of VAT on photovoltaic inverters and batteries
• Time frame for permit approval process of renewable energy investment project will be reduced
• ‘More emphasis should have been put on investments on photovoltaic, wind and wave energy projects. 

Business Facilitation 

• Reduction in time lag of approval of building and land use permits and clearances for construction related projects
• Review and amendment to the property development scheme
• Amendment of the investment promotion act to facilitate clearances and approval of business start-ups
• Introduction of the Regulatory Sandbox licenses for the issue of licences and permits for innovative projects
• Non-citizens, registered with BOI, will be allowed to acquire apartments and spaces in buildings
• Investment opportunities in Senegal
• Opening of a consulate in Reunion Island 

In order to reduce red-tape, the BSP students think that on-line licence renewal should have been announced.

Fiscal measures

“We are happy to see that at last government has come to understand that less tax keeps the financial sector rolling and the economy of a country more dynamic,” the students concluded.