· The Mauritius Government has proposed to impose a 15% tax on subscriptions to online services. This will bring online service providers like Netflix, Amazon Prime, Google Drive, PlayStation Network, Cloud services, streaming television, etc under the new tax dispensation
· The lack of revenue flows is compounded by the outbreak of the pandemic, wherein the government is called upon to spend more on healthcare and meeting the basic needs of the common man under the lockdown
· To meet such exigencies, the government wants to broaden the tax base in order to mop up revenue.
The Mauritius Government has proposed to impose a 15% tax on subscriptions to online services. This will bring online service providers like Netflix, Amazon Prime, Google Drive, PlayStation Network, Cloud services, streaming television, etc under the new tax dispensation. The proposal is resisted by the opposition parties and among internet users. They feel that it will be an additional burden on consumers in these times of economic austerity. This proposal, which defines “electronic or digital service” as any service provided by a foreign provider on the Internet or an electronic platform is contained in the Budget presented to the National Assembly by the finance minister on July3,2020.
Experts feel that the government is looking at new revenue sources to meet its development efforts. The lack of revenue flows is compounded by the outbreak of the pandemic, wherein the government is called upon to spend more on healthcare and meeting the basic needs of the common man under the lockdown. To meet such exigencies, the government wants to broaden the tax base in order to mop up revenue.
At first, the government wanted to collect more revenue from rich tax payers to the extent of Rs 3.5 billion. For this, the government proposed to increase the solidarity tax from 5% to 25% on the annual income of the individual having income exceeding Rs 3 million, with a marginal tax rate of 40% . This has led to stiff resistance from the wealthy tax payers and the government has retreated. Finally, the increase in tax rate was limited to 10% from the earlier proposed rate of 40%. That has forced the government to for taxing the online services, which is also facing resistance from the opposition parties and net users.
