On the 12th March 2021, the Mauritius Revenue Authority (MRA) released the Covid 19 Guide. The MRA regularly publishes guides on selected tax issues and the release of this covid-19 guide is to educate taxpayers to facilitate tax compliance.
The Covid-19 period in Mauritius started on 23 March 2020 and ended on 01 June 2020. During these months, the Government set up a Government Wage Assistance Scheme (GWAS) to provide financial support to employers.
On 16 May 2020, the Covid-19 Act 2020 was enacted, and a Covid-19 levy was imposed on companies and resident sociétés that benefited from an allowance under GWAS.
Every employer having benefited from the GWAS in an income year has a requirement to declare the Levy in the income tax return and pay it on or before the due date for the submission of the return.
The Covid-19 guide contains 19 scenarios to help guide taxpayers in calculating the levy amount to be remitted.
Treatment of GWAS
The guide is clear that the GWAS allowance received is a subsidy that shall form part of the gross income of an entity in the year GWAS was received.
GWAS shall therefore be included in the calculation of the chargeable income and is taxable.
Treatment of Covid Levy
The levy is in essence a reimbursement of the GWAS. The GWAS has either increased chargeable income, or it has reduced the loss that would have been available to carry forward.
The levy therefore shall be treated as an allowable deduction in the year in which it is payable.
Payment Due Dates
The levy shall be paid on or before the date by which the
income tax return is required to be submitted.
The levy payable shall also be declared by the employer in his income tax return.
Failure To Pay
Where an employer who is required to pay a levy fails to do so on or before the date it is payable, the MRA may, within a period of 3 years from the date the levy is payable, issue a claim to him requesting him to pay the levy, together with any penalty and interest applicable, within 28 days from the date of the notice.
The penalty for failure to pay the levy is 10% of the amount of the levy remaining unpaid.
The interest rate is 1% per month or part of the month during which the levy remains unpaid.