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Budget for 2007/08 – details — Orbitax Tax News & Alerts

The Budget for 2007/08 was presented to the parliament by the Minister of Finance and Economic Development on 15 June 2007. Details of the Budget, which unless otherwise indicated will apply from 1 July 2007, are summarized below.

Direct taxation

Corporate taxation. The changes include:

-   the progressive reduction of the corporate tax rate announced in the budget for 2006/07 will be accelerated. Consequently, the 15% corporate tax rate planned to take effect in 2009 will now take effect on 1 July 2007;
-   a special levy will be imposed on profitable banks at the rate of 0.5% of their turnover and 1.7% of their accounting profits. The amount due for the year 2007/08 will only be 30% of the payable amount; and
-   an advance payment system (APS) will be introduced for companies, which will require them to make provisional quarterly tax payments based on the taxable income of the previous year. The APS will be effective from the financial year commencing on 1 July 2008 for large taxpayers (i.e. companies with an annual turnover exceeding MUR 100 million) and on 1 July 2009 for small and medium companies.