Tax - Who needs to pay and how much

Tax is money that is imposed upon individuals or groups by a state or government, failure of which is a legal offense. The definition can be further extended to a compulsory donation to the government from workers’ salary, business profits (direct tax) or additional value to the normal price of some goods, services or even transactions (indirect tax). The aim of levying tax is for the government to use this money to help in public matters such as infrastructure restoration, in public systems (education, health care etc), public utilities etc. In our country, the Mauritius Revenue Authority (MRA) is the responsible body for the management and accounting of tax levies on the island (including VAT, customs, excise, and gaming). The office is located at Ehram Court, Cnr Sir Vigil Naz and Mgr Gonin Streets, Port Louis (207-6000).

Taxable supplies and people

The rate of 15% VAT (Value Added Tax) is payable on all taxable goods and services (unless specifically exempted from tax) whether it is by a taxable person or not. A taxable person is someone who is registered for VAT; as such tax is charged on all goods sold to his customers (output tax) as well as claimed from him by his suppliers (input tax). A person who is in business may also become taxable once the turnover of his taxable goods exceeds prescribed limits or if he is engaged in a specific business which demands that he pays tax. Usually a person whose turnover of taxable supplies is equal to or exceeds Rs2million annually is required by law to pay tax as are those in the profession of accountant, advertising agent, adviser, architect, attorney/solicitor, barrister at law, clearing and customs agent, consultant, customs house broker, engineer, estate agent, land/marine/motor surveyor, notary, optician, project manager, property valuer, quantity surveyor, sworn auctioneer, sales agent of airlines, dealers under the jewellery act and those engaged in banking, insurance, management and credit card management.

Exempted and zero rated goods

All goods are subject to VAT (15%) apart from those specifically exempted and those which are zero rated. Zero rated supplies are actually chargeable supplies but at a rate of zero. The differences between these two are that tax on zero rated supplies can be claimed as a deduction of input tax related to them and a person dealing with these supplies is not required to register for VAT while exempted goods definitely have no tax whatsoever and a person dealing with them cannot be registered for VAT. Most goods and services for export are zero rated (some locally distributed items are also zero rated) such as wheat flour and bran, edible oils, margarine, sugar, fertilizers, animal feeds etc. Some supplies exempted from VAT include rice, wheat, bread, milk and cream, herbicides, educational and training services etc.

Visitors and tax

Under customs control, a visitor may be refunded the tax money paid on a specific good at the airport or port or may be delivered a good at the airport or port minus the tax price. A visitor is someone who has a passport and a valid ticket to another port. However, tax is not removed from spirits, wine, cigarettes or tobacco related supplies. Documents needed for refund include the receipt (duplicate) of purchase and passport; claims are made at the MCCI Refund Counter in the Departure Lounge at the SSR airport or Customs Officer at the port. Refunds are usually made in Pound Sterling, Euros, Dollars and South African rand. No refund is made where the amount refundable is less than Rs200; an administrative fee of Rs100 is also charged for this process. The definition of tax, the responsible body in Mauritius and contact information, taxable persons and supplies, exempted and zero rated goods and customs control for visitors.