To revive and motivate Industrial Development, the Government is introducing a Modernization and Transformation Fund of Rs 5 billion which will be managed by a new Industrial Financial Institution, IFI. It will take over the activities of ISP Ltd and the SME Equity Fund. Eligible companies and projects will benefit from leasing facilities at a preferential rate of 2.5% per annum over an extended period of up to 9 years.
Leasing Equipment Modernization Scheme (LEMS) are bound to be reduced. “LEMS I, from 3.9% to 2.9% for companies with turnover is less than 50 million rupees, LEMS II, from 4.25% to 3.25% for companies with turnover between 50 million and 250 million rupees and LEMS III, from 4.75% to 3.75% for companies with turnover above 250 million rupees” announced Renganaden Padayachy during his speech.
Especially for SMEs during the crisis period, the finance minister has announced a series of advantages. The Government will, as announced during the budget speech, “continue to support the payment of wages through the financing of the wage compensation of 375 rupees by months for the coming fiscal year. There will be an extension on the exemption on commercial costs not exceeding 5,000 rupees for an additional 5 years, and an amnesty on commercial fees and associated penalties and interest that were due before January 1, 2020. The Tax Arrears Settlement Scheme for SMEs will be extended till December 2021. There will also be an increase from Rs 150,000 to Rs 200,000 on the grants for all programs implemented by SME Mauritius Ltd”.
New loan facilities were also at the centre of the announcements. SMEs will be eligible to a series of DBM loan programs, a Rs 100,000 Interest Free Loan to address cash flow difficulties, and a 0.5 percent Covid-19 Special Support Scheme up to Rs 1 million.
The DBM will also provide an amount of one billion rupees for the granting of loans of up to 5 million rupees to retailers whose turnover does not exceed 250 million rupees at a preferential rate of 3.5 %.
The government will also encourage SMEs to better gather and locate. Through the DBM, there will be a provision for a discount of up to 30 % on the annual rental of industrial space to SMEs engaged in the manufacturing sector over the next 3 years. The finance has also announced the construction of an industrial park for SMEs of 5,000 square meters in Solferino, in addition to Plaine Magnien and Vuillemin. It is set that an allocation of 20% of the space in these future parks will be free of charge to start-ups during the first three years of operation. Through EDB, start-ups will beneficiate of an online marketplace. Large enterprises sourcing from SMEs will beneficiate a 110 % deduction on their taxable income.
