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Budget 2016-2017: Manufacturing sector to lead in adoption of new economic cycle


Budget 2016-2017: Manufacturing sector to lead in adoption of new economic cycle

Budget 2016-2017 paves the way for the adoption of a new economic cycle focused on innovation, boosting exports and private investments. Productive sectors are expected to make a significant leap in embracing new activities and modern ways of doing business. The manufacturing sector which is the largest contributor to GDP will take the lead in this new economic cycle.

Budget 2016-2017 outlines actions geared towards advancing the manufacturing sector to new frontiers; diversifying its base; and, modernising the sector.

Advancing the sector

Three new niches will be launched:

  • Setting up of a modular near shore mobile oil refinery and onshore storage facilities at Albion by an international private consortium. With this project, Mauritius is likely to become a leading source of low Sulphur bunker fuel (LS380) in the Indian Ocean region.
  • Opening up the country to a wide spectrum of gold business such as refinery of gold, producing gold bars, setting up of top-end jewellery processing units, vault facilities, and enabling the trading of gold and bullions on Mauritius’ new Commodity Exchange. The Exchange will also facilitate trade in diamond and other precious metals.
  • Setting up of several manufacturing projects, one of which is the production of bicycles and motorcycles for exports to the African market.


Diversifying the base

Other measures to further diversify the manufacturing sector comprise:

  • Setting up of a Pharmaceutical Village at Rose Belle to cater for the local market as well as African markets.
  • Introduction of the application of 3D printing technology, by equipping the two technopoles at Rivière du Rempart and Rose Belle with 3D printers and removal of VAT on 3D printers. Provision is being made for customs duty exemptions on materials used in the manufacture of medical devices.

Modernising the sector

With regard to modernisation of the manufacturing sector, the following measures are announced:

  • Overhauling of the investment tax credit whereby a specified manufacturing company is able to offset against its tax liability 5% of the investment in new plants and machinery over 3 years. The minimum eligibility requirement of Rs 100 million investment in a year is being removed. This will allow more businesses to benefit, and the tax credit can be recouped over a longer time period.
  • Increasing the tax credit from 5 to 15% for manufacturers of textiles, wearing apparels, ships and boats, computers, pharmaceuticals and for film production. This represents 45% of capital expenditure incurred on new plants and machinery over three years.
  • Repositioning the textile and apparel sector in a bid to improve competitiveness and bring Mauritius nearer to the European markets as the country faces the challenges of Brexit. A major Air Freight Rebate Scheme will be introduced bringing a 40% reduction by Air Mauritius of the air freight cost to Europe.
  • Increasing the Bid Price-Preference from 10% to 20% for locally manufactured goods in respect of the procurement exercise by public sector bodies. This measure will apply to such goods as shoes, uniforms, school books, printing materials and furniture which will be listed in a Schedule. The aim is to support the ‘Made in Moris’ initiative of the manufacturing industry.

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