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Personal Tax

Personal Tax

Personal Tax

Tax Band of 10%

  • The annual net income subject to tax at a lower rate of 10% has been increased from MUR650,000 to MUR700,000
  • Also, the individual will be entitled to a tax credit of 5% of his chargeable income when filing his personal tax return provided that his first month’s salary including salary compensation is less than MUR50,000.

Income Exemption Threshold

  • Effective as from the income year starting on 1 July 2019, the Income Exemption Threshold for all category has been increased as detailed in Tax Rate Card.

Other Exemptions and Reliefs

  • Deduction for Tertiary Education
    • The deduction in respect of a dependent child pursuing a tertiary education can be claimed in respect of 4 dependents instead of 3 dependents.
  • Relief for medical or Health Insurance Premium
    • An individual will be allowed to claim up to MUR10,000 as relief for a 4th dependent.
  • Acquisition of fast charger for an electric car
    • The total Investment made in relation to the acquisition of a fast charger for an electric car can be claimed as a deduction from taxable income.

Peer-to-Peer Lending

  • Interest income derived from Peer-to-Peer lending will be subject to income tax at the rate of 3%
  • Peer-to-Peer interest will not subject to any tax deducted at source
  • Any bad debt and fees payable to the Peer-to-Peer Operator will be deductible from the taxable interest income.

Solidarity Levy

  • The definition of chargeable income under leviable income excludes any lump sum income received by way of commutation of pension, death gratuity or as a compensation for death or injury and will be effective retrospectively as from 1 July 2017
  • Also, an individual’s share of dividend in a societé or succession will be included in the computation of the solidarity levy.

KPMG Views

  • Employees earning a net income between MUR650,000 and MUR700,000 will also benefit from a lower tax rate of 10%. However, there is still the anomaly where an individual’s earnings is increased just above the threshold of MUR700,000 during an income year as the tax suffered on the additional income may be much higher than the increase in net annual income
  • Leviable income subject to solidarity levy now includes share of dividend in a societé or succession with the aim to close any loophole in the law.
     

Disclaimer

The above information has been extracted from the budget speech delivered by The Honourable Pravind Kumar Jugnauth, Prime Minister, Minister of Home Affairs, External Communications and National Development Unit and Minister of Finance and Economic Development, to the National Assembly, on 10 June 2019.

The Budget proposals may be amended significantly before enactment. The content of this summary is intended to provide a general guide to the subject matter and should not be regarded as a basis for ascertaining liability to tax or determining investment strategy in specific circumstances. In such cases specialist advice should be taken.