Africa-Press – Mauritius. The Leader of the Opposition, Joe Lesjongard, raised concerns about the impact of fiscal measures in the 2025/26 budget on Small and Medium Enterprises (SMEs), specifically the reduction of the threshold from Rs 6 million to Rs 3 million. Minister Adil Ameer Meea defended the government’s move, stating that it is expected to generate Rs 1.9 billion in revenue and is necessary for responsible fiscal management under Prime Minister Navin Ramgoolam’s leadership, given the existing budget deficit and public debt.
The Minister clarified that the new measure does not apply to traders selling fresh vegetables, fruits at the market, or fish. He emphasized that Value Added Tax (VAT) is a consumption tax, and the system is designed to be neutral. Businesses registered for VAT can recover taxes paid on inputs like raw materials and machinery, which non-VAT registered SMEs cannot, leading them to pass on the VAT to consumers.
Adil Ameer Meea revealed that the additional revenue is estimated at Rs 1.9 billion from 6,900 operators. He noted that 8,468 operators with a turnover of less than Rs 6 million have already registered voluntarily, attracted by the benefits of the VAT system. The Minister stated that he has consulted with SME representatives and is open to their suggestions, working with the Mauritius Revenue Authority (MRA) to simplify the implementation of the measure.
Addressing concerns that the new measures would burden small family businesses and require them to hire professionals like accountants, the Minister announced that a special SME office will be established at the MRA to assist with inquiries. The MRA will also publish brochures to provide guidance on registration. When asked about the potential for a cascading effect on prices, the Minister argued that SMEs could recover VAT paid on inputs, mitigating the need for price increases.
The Minister acknowledged the importance of the SME sector to the economy and workforce but dismissed concerns that businesses would reduce staff. He reiterated that the government had to make a difficult decision to expand the VAT base to generate additional revenue, as raising the VAT rate would disproportionately affect the poor.
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