The budget finally brought a ray of hope that can replace the dark effects of the pandemic on mainly the SMEs’ economic circumstances in Mauritius. On 11 June, the budget was presented in favor of boosting the economy. Though it is obvious that all global economies will take time to recover from the impact of the pandemic, innovative measures are being taken to speed up the recovery. We’ve made a list of some of the measures that will directly help startups through various financial support initiatives and schemes.
Access to Loans
To help SMEs and startups with financial resources, the government has devised some loan schemes at very low-interest rates.
- A loan of up to Rs 5 million can be availed by retailers whose turnover is up to Rs 250 million with the annual interest rate as low as 3.5%
- The Development Bank of Mauritius shall offer loans of Rs 100,000 without charging interest to help women entrepreneurs manage their cash flow
- Moreover, a COVID-19 Special Support Scheme loan of up to Rs 1 million can also be obtained by women entrepreneurs at the rate of 0.5% interest.
The government has also rolled out some additional schemes that ease out the financial obligations for running SMEs and startups.
- A slight relief in payment of salaries or wages for startups to retain their human resources can be availed of up to Rs 375 every month for whole the upcoming financial year
- The government has also extended the trade fee exemption of Rs 5,000 by five years
- Amnesty has been granted on trade fees, penalties and interests that were due before January 2020
- The Tax Arrears Settlement Scheme for SMEs has been extended until December 2021
- The total maximum grant given to all SME Mauritius schemes has been increased from Rs 150,000 to Rs 200,000
Promoting SME and startup businesses
The government has also taken measures that will boost the growth of SMEs by helping relax some of their overheads and developing innovative facilities.
- Taxpayers will enjoy a 110% deduction on taxable income for spending on the purchase of locally manufactured products, especially by startups and SMEs
- SMEs and startups will enjoy a 30% rebate on the annual rental of the industrial space for the next 3 years
- The construction of an SME Industrial Park in Solferino, with 20% of free space allocated to startups for the first 3 years
- The government is also investing in the creation and development of an online marketplace for startups
- The Credit Guarantee Scheme (CGS) for SMEs has been extended. It involves 5% of the default amount on leases contracted from private leasing companies.
- A 200% deduction from taxable income for the acquisition of specialised software and systems has been introduced
- To help revive the tourism sector, the government has the Wage and Self-Employed Assistance Schemes until September 2021
- Additionally, the government has introduced a Tourism Business Continuity loan for SMEs through the DBM at the rate of 0.5% p.a.
Training & Development Support
The government will provide training and re-skilling opportunities to about 10,000 individuals to promote self-employment and boost the SME /startup sector. 6,000 unemployed individuals will undergo training and re-skilling under The National Training and Reskilling Scheme
- 750 apprentices will be trained under the National Apprenticeship Programme. They will also receive a monthly stipend of Rs 5,000 and a travelling allowance of Rs 1,000
- The Youth Employment Programme will be extended for another year for around 2,250 HSC, diploma and degree holders
- The SME Graduate Scheme will cater for around 1,000 graduates and diploma holders, and will also cover vocational training
- The Dual Training Programme will be renewed to cover 60% of the academic fees of employees.
This is a summarized version of the budget presented by the Minister of Finance, Economic Planning and Development, Dr Hon Renganaden Padayachy. Here we have highlighted the measure taken specifically for the SME and startup sector. In our view, the budget Preserve jobs and livelihoods for the most vulnerable of our society looks promising in terms of rebuilding our SME sector and ensuring an inclusive, robust and sustainable economy.