The Minister of Finance of the Republic of Mauritius during his budget speech dated the 14th June 2018, has announced that In order to reduce the gap between the rich and the poor, the Income Exemption Threshold has been increased by Rs 5,000 throughout each category:-
- An individual with no dependent will only start to pay tax when his/her annual earnings exceeds Rs 305,000;
- An individual with one dependent will only start to pay tax when his/her annual earnings exceeds Rs 415,000;
- An individual with two dependents will only start to pay tax when his/her annual earnings exceeds Rs 480,000;
- An Individual with three dependents will only start to pay tax when his/her annual earnings exceeds Rs 525,000;
- An individual with four or more dependents will only start to pay tax when his/her annual earnings exceeds 555,000;
- Retired/ disabled person with no dependent will only start to pay tax when his/her annual earnings exceeds Rs 355,000;
- Retired/ disabled person with one dependent will only start to pay tax when his/her annual earnings exceeds 465,000.
Previously the income tax was at a flat rate of 15% for all those earning more than the income exemption threshold but however it has been announced that the new tax regime for personal income will be as follows:-
- For those annually earning between Rs 305,000 and Rs 650,000 only 10 % personal income tax will be charged; and
- For all those annually earning more than Rs 650,000 the personal income tax will remain at 15%.
For employees who receive a lump sum as severance, pension or retiring allowance, the exemption threshold is being increased from Rs 2 Million to Rs 2.5 Million.
Furthermore for those with a dependent child pursuing Tertiary Education, they will be able to claim a relief of up to Rs 200,000 if the university is outside the Republic of Mauritius and up to Rs 175,000 if the university is within the Republic of Mauritius.
*** For more details about personal income tax please consult the Budget Speech 2018-2019 here.