Smart Cities: Rs 6.61 Billion Tax Perks on the Chopping Block? 

In a pivotal decision that could reshape the landscape of urban development in Mauritius, Prime Minister Navin Ramgoolam announced in Parliament on Tuesday 6th May that the tax advantages granted to developers under the Smart City Scheme are currently under scrutiny as part of the upcoming budgetary exercise.

This revelation came in response to a probing question from Babita Thannoo, the MP for Quartier-Militaire and Moka, on 6th May.

Since its official launch on 18th June 2015, the Smart City Scheme has been heralded as a beacon of hope for the creation of sustainable and intelligent urban environments across the island.

To entice developers into this ambitious initiative, the government has extended a plethora of tax exemptions, which have cumulatively amounted to a staggering Rs 6.61 billion since the scheme’s inception.

Key Tax Incentives for Developers

Among the most notable incentives are a VAT exemption on buildings and infrastructure, an eight-year tax holiday on income generated from real estate activities within Smart Cities, and a waiver of customs duties on the importation of machinery and construction materials.

Additionally, developers benefit from exemptions on registration fees and land transfer taxes when transferring land to a Smart City Company, as well as relief from subdivision fees and land conversion taxes for non-residential projects.

Government’s Fiscal Responsibility

In light of the current economic constraints, Prime Minister Ramgoolam emphasised that the Ministry of Finance is meticulously evaluating the effectiveness of these fiscal measures.

He stated, “The possibility of revisiting or even abolishing certain tax exemptions granted to businesses operating within the Smart Cities will be examined with utmost care.”

This statement highlights an increasing awareness of the importance of fiscal prudence and accountability, reflecting a proactive approach to addressing public concerns about the impact of significant financial concessions on the nation’s resources.

Source: Defi Media